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Top small finance bank stocks in 2024

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Published Date: 20 Jun 2024Updated Date: 27 Dec 20246 mins readBy MOFSL

Introduction

The Indian economy is likely to maintain its growth pace in 2024. If you want to earn gains and participate in this growth, you can explore Small Finance Bank (SFB)  stocks. 

Before getting to the list of the top five SFB stocks for 2024, you must understand what SFBs are.  

What are SFBs?

SFBs are responsible for providing banking services to rural and semi-urban areas. They provide loans and accept deposits from underserved segments like small and marginal farmers, micro and small industries, small businesses, and unorganised sector entities. 

In the Indian banking sector, SFBs are a growing segment. They are expected to play a vital role in securing financial inclusion and offering banking services to unbanked and underbanked areas. 

The Reserve Bank of India (RBI) regulates and controls the operations of Indian SFBs. These banks must follow RBI’s guidelines to ensure careful risk management and responsible loan practices. 

When you invest in SFB stocks, you buy a part of these banks. Since the Indian government is focused on developing a favourable regulatory environment and encouraging the growth of SFBs, you can expect a level of stability. Moreover, as financial inclusion expands, the room for growth is significant, increasing your likelihood of earning profits.  

List of 5 SFB stocks you can’t miss in 2024

 

1. AU Small Finance Bank 

AU Small Finance Bank was incorporated in 1996. It offers a wide range of banking services such as lockers, ATMs, savings and current accounts, interest calculators, EMI calculators, fixed deposits, recurring deposits, etc. It deals in retail banking and provides loans to small and medium enterprises (SMEs). The insurance segment offers motor insurance, health insurance, life insurance, SME insurance, etc. 

As of June 13, 2024, the bank’s share was trading at Rs. 66 9.25 on the National Stock Exchange (NSE). Its market capitalisation stood at Rs. 49,743 crore. 

2. Ujjivan Small Finance Bank

Ujjivan Small Finance Bank started in 2005 as a non-profit company. It is a well-recognised bank in the microfinance sector. It received the SFB license in 2017 and has achieved a network of over 550 offices and a customer base of more than 5.5 million since then. It offers housing, small business, and microfinance loans, especially targeted toward low-income groups.  

The bank’s share was trading at Rs. 49.63 on NSE as of June 13, 2024. Its market capitalisation was worth Rs. 9,577 crore. 

3. Jana Small Finance Bank

Jana Small Finance Bank was established in 2006 as a private company. It transformed into a public company in 2015 and received RBI’s license to operate as an SFB in 2017. The bank has evolved as a new age digitalised bank and offers a wide range of digital services and products on mobile and web. It offers savings and current accounts, loans, deposits, payments, insurance, online banking, and safe deposit locker facilities. 

As of June 13, 2024, Jana Small Finance Bank’s stock trading price was Rs. 713.90 on NSE. The market capitalisation was worth Rs. 7,472 crore. 

4. Equitas Small Finance Bank

Equitas Small Finance Bank entered the microfinance segment in 2007. It has a pan-India reach, with a prominent presence in Andhra Pradesh, Karnataka, Maharashtra, and Tamil Nadu. The asset products offered to underserved segments in India include Small Business Loans (SBL), which housing loans, loans against property, and agriculture loans for micro-entrepreneurs.

Equitas Small Finance Bank’s share trading price was Rs. 100.15 on June 13, 2024, on NSE. Its market capitalisation stood at Rs. 11,380 crore.

5. Utkarsh Small Finance Bank Ltd.

Utkarsh Small Finance Bank has offered banking and financial services to unbanked and underbanked regions since 2016. It operates through the segments of personal banking, business banking, and micro-banking. Customers can enjoy different banking methods like internet banking, mobile banking, ATM banking, UPI, etc. The bank also focuses on women’s empowerment and offers loans to women entrepreneurs. 

As of June 13, 2024, the bank’s share trading price was Rs. 53.79 on NSE. The market capitalisation was worth Rs. 5,917 crore. 

Conclusion

The above-mentioned bank stocks have revealed strong fundamentals, impressive growth graphs, and robust profit potentials. You can consider them to earn exciting returns and cherish the satisfaction of contributing to a social cause.

 

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Disclaimer: The stocks, companies, or financial instruments mentioned in this blog are for informational purposes only and should not be considered as investment recommendations. It is advised to consult with your financial advisor before making any investment decisions. Investment in securities markets are subject to market risks, read all the related documents carefully before investing. Investors are strongly encouraged to carefully read the risk disclosure documents prior to participating in market-related investments or trading activities. Due to the volatile nature of financial markets, no guarantees can be made regarding investment returns. Motilal Oswal Financial Services Ltd. does not offer any assured returns on market-linked securities. Please note that past performance of stocks or indices is not indicative of future results.
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