Top Financial Stocks in India

India’s financial sector is a key part of the country’s economy and touches nearly every citizen’s life through digital payments, lending, investments, and financial inclusion. As the economy grows, so does the penetration of this sector. Whether it’s offering credit to first-time borrowers or enabling digital payments in tier-3 cities, financial companies are now more relevant than ever.

This article highlights the top financial stocks in India to help you understand whether you should invest in them or not. Let’s start!

An Overview of the Financial Sector in India

India’s Non-Banking Financial Companies (NBFCs) remain a key pillar in the finance sector, expanding credit access and promoting financial inclusion across the country. In FY25, NBFCs delivered a strong year with credit growth touching nearly 20% year-on-year, outperforming the 12% growth seen by traditional banks. 

Their total outstanding advances stood at around ₹24.5 lakh crore, with retail lending accounting for close to 58% of the overall loan portfolio as of December 2024. This impressive growth was fuelled by strong demand across segments such as gold loans, microfinance, consumer durable financing, and small business (SME) lending.

At a broader level, the overall finance sector has also experienced growth in the last few years, with the increased usage of tools like UPI, which changed how people make payments. UPI handled more than 11,761 crore transactions worth ₹180.24 lakh crore in FY25. That’s a 59.2% jump in the number of transactions and a 44.8% rise in value compared to the previous year. UPI now accounts for 84% of all retail digital payments. In the near future, with better digital access, a growing economy, and more people entering the formal financial system, India’s financial sector is expected to keep expanding and playing a key role in the country’s growth story.

List of Top Financial Stocks in India

Numbers always speak the truth. Check the table below to learn about the top 5 financial stocks in India and what makes them worth investing in. 

Overview of the Top Financial Stocks in India

Let’s understand what makes these financial companies in India worth investing in as the best financial stocks for the long term.

1. Bajaj Finance

Bajaj Finance, part of Bajaj Finserv, is India’s largest non-banking retail financier. Incorporated in 1987 as Bajaj Auto Finance, it has grown into a diverse consumer lending conglomerate. 

As of Q4 FY25, the company serves over 101.8 million customers, adding 4.7 million new clients during the quarter. Its assets under management (AUM) reached ₹4.17 lakh crore, up 26% YoY in Q4FY25. The company’s net profit also surged 19% year-on-year to ₹4,546 crore, marking strong profitability momentum. Its net interest income (NII) rose 22.4% YoY to ₹9,807 crore, also showing a sequential uptick of approximately 4.5%. Also, the company booked a record 10.7 million new loans, marking a 36% YoY increase, underscoring its leadership in retail and SME financing.

Bajaj Finance also rapidly built a credit card and payment business by launching its co-branded EMI cards and UPI payments, and is expanding into “buy-now-pay-later” solutions. The company’s long-term strategy includes deepening digital offerings and broadening distribution; it plans over 5,200 touchpoints by FY29. With strong profitability and low credit costs relative to its growth, Bajaj Finance is positioned as a leader in consumer finance and micro-lending in India.

2. Jio Financial Services Ltd

Jio Financial Services, demerged from Reliance Industries in 2023, is a digital-first financial powerhouse and aims to become a full-stack player in India’s financial ecosystem. The company invested ₹1,346 crore across its subsidiaries, including Jio Finance Ltd, Jio Payments Bank Ltd, and its joint ventures with BlackRock to support growth and expansion. This capital was aimed at scaling its lending, payments, and asset management operations, while also boosting infrastructure and product rollouts.

By the end of March 2025, Jio Finance Ltd’s NBFC arm witnessed explosive growth in its assets under management, rising from ₹173 crore in FY24 to ₹10,053 crore, a staggering 5,700% jump in just one year. The company also posted a consolidated net profit of ₹1,613 crore for FY25, maintaining strong momentum from the previous year’s ₹1,605 crore.

Going beyond lending and payments, JFSL is venturing into wealth and asset management. It’s a 50:50 JV with BlackRock, JioBlackRock Asset Management, which received SEBI approval in May 2025 to offer mutual funds. The company is also seeking an Online Payment Aggregator license and entry into broking, home loans, and loans against securities.

In June 2025, Jio Financial Services Ltd (JFSL) acquired State Bank of India’s 17.8% stake in Jio Payments Bank for ₹104.54 crore, making it a wholly-owned subsidiary. The move strengthens JFSL’s position in the digital banking space as it works toward building a comprehensive, tech-driven financial ecosystem.

3. Shriram Finance

Shriram City Union Finance (SCUF), part of the Chennai-based Shriram Group, was founded in 1986 to serve India’s unbanked and underserved. It is a specialist retail financier focused on small and medium-enterprise loans, used two-wheeler loans, and gold loans. SCUF is a market leader in these segments, thanks to its “field force” of 25,000 agents and branch network across semi-urban/rural India. It deliberately targets low-ticket, collateral-backed lending to small borrowers. 

In Q4 FY25, Shriram Finance posted a strong performance, with assets under management (AUM) rising 17.05% YoY to ₹2.63 lakh crore. Its net profit grew by nearly 10% YoY to ₹2,139 crore, while total income surged 21% to ₹11,460 crore.

Shriram manages its asset quality by focusing on secured, short-tenure loans, which helps mitigate risk. However, given its focus on underserved customer segments, its NPA levels are slightly higher than those of traditional banks, with Gross Stage 3 assets at 4.55% and Net Stage 3 at 2.64% as of Q4 FY25, along with a provision coverage ratio of 43%.

To improve efficiency and reach, Shriram has embraced digital innovations like e-KYC, instant digital onboarding, and automated EMI collections via the Shriram One app, UPI, and BBPS. These efforts have streamlined customer journeys, reduced paperwork, and improved repayment efficiency, especially in semi-urban and rural areas. The company has also partnered with TrucksUp to offer digital financing to fleet operators and expand its last-mile digital reach.

4. Muthoot Finance

Muthoot Finance, formally incorporated in 1979 under a business dating to 1939, is India’s largest gold-loan financier. It is trusted by millions for quick and secure loans backed by decades of legacy and nationwide reach. It had a pan-India network of 7,391 branches, having added 850 new branches in FY25.

In Q4 FY25, consolidated net profit rose 22% year-on-year to ₹1,444 crore, while standalone profit surged 43% to ₹1,508 crore, reflecting strong demand for gold loans and operational efficiency. The loan assets under management (AUM) grew 37% YoY to ₹1.22 lakh crore, with gold loan AUM contributing ₹1.03 lakh crore, up 41% from the previous year.

Beyond gold loans, Muthoot Finance actively contributes to social causes through its “Haathi Mera Saathi” CSR programme, offering educational kits, smart classrooms, medical equipment, and mobility aids across states. In early 2025, it awarded ₹1.34 crore in scholarships to school students and launched the Muthoot Finclusion Challenge to promote innovative fintech solutions and support financial inclusion for rural women.

Muthoot Finance has enhanced its digital services through the revamped iMuthoot app, which offers 24×7 digital gold loans, instant top-ups, UPI/net banking payments, and an AI chatbot “MATTU”. The app has crossed 50 lakh downloads, reflecting strong adoption. To speed up approvals, Muthoot introduced paperless KYC and e-signing, enabling loans in under 30 minutes. It also launched AI-powered assistants like MATTU & MITTU to handle customer queries round the clock. These innovations reflect Muthoot’s focus on tech-driven efficiency and customer convenience.

5. Aditya Birla Capital Limited

Aditya Birla Capital (ABCL), established in 2007,  is a financial services holding company of the Aditya Birla Group. In April 2025, ABCL completed the merger of Aditya Birla Finance Limited (ABFL), creating a larger, consolidated NBFC. This strategic move is aimed at unlocking operational synergies, boosting efficiency, and expanding ABCL’s lending footprint across India. 

To further support growth, ABCL invested ₹249 crore in Aditya Birla Housing Finance Limited (ABHFL) in May 2025, following a previous ₹300 crore infusion through a rights issue. The company’s board has also approved raising funding of up to ₹1.65 lakh crore via debt securities, including NCDs, for its long-term expansion plans and strengthening its position across the financial services ecosystem.

ABCL is rapidly scaling its digital and distribution footprint. Its D2C platform ABCD now has around 5.5 million users, offering over 25 financial products, while the B2B MSME platform Udyog Plus has crossed ₹3,500 crore in AUM with 2.2 million registrations. ABCL is steadily growing in lending, insurance, and wealth management, and is building a strong digital-first financial platform for the future.

Things to Consider While Investing In Financial Companies

Before investing in any finance sector stocks in India, consider:

1. Regulatory Environment

The financial sector is closely regulated by authorities such as the RBI, SEBI, IRDAI, and the Ministry of Finance. Regulatory guidelines affect lending practices, interest rate margins, capital reserves, and risk exposure. Any changes in these regulations, such as tightening of NPA norms or credit caps, can impact profitability. Investors must track announcements and updates from key regulators.

2. Asset Quality

Asset quality reflects the health of the company’s lending book. If a large portion of loans goes unpaid (becoming NPAs), it erodes profits and investor confidence. Check Gross NPA and Net NPA levels, provisioning policies, and the historical trend of bad loans. Companies with strict credit assessment and strong recovery practices typically maintain better asset quality.

3. Capital Adequacy and Financial Strength

Capital Adequacy Ratio (CAR) indicates whether a financial institution has enough capital to absorb losses. A higher CAR means better protection against unexpected losses. Along with CAR, review the debt-to-equity ratio, liquidity coverage ratio, and overall financial leverage to understand the company’s stability.

4. Profitability Metrics

Return on Assets (RoA), Return on Equity (RoE), Net Interest Margin (NIM), and cost-to-income ratios provide insights into a company’s efficiency and profitability. Consistently high RoE and stable NIMs are indicators of a well-run financial business.

5. Technological Integration

Companies with strong digital infrastructure often enjoy cost advantages and customer loyalty. Evaluate if the institution has mobile platforms, internet banking, data analytics for risk assessment, and AI-powered service tools. In the fintech space, tech adoption is not a bonus—it’s a baseline requirement.

6. Market Presence, Reach, and Governance 

A wide physical branch network and a growing customer base indicate a strong operational presence. Look for indicators such as customer acquisition rates, rural penetration, and partnerships with payment or UPI platforms. Also, corporate governance is essential in a sector where trust is critical. Review the company’s board structure, audit practices, leadership track record, and past compliance issues. Companies with transparent reporting and proactive communication are preferable.

7. Diversification and Business Segments

Companies involved in multiple financial services, such as lending, insurance, mutual funds, and digital payments, are better cushioned during sectoral downturns. Diversification across geographies and customer types (retail, SME, and corporate) also reduces dependency on a single revenue stream.

Conclusion

India’s financial sector is poised for long-term growth, supported by rising income levels, formalisation of the economy, digital infrastructure, and greater credit penetration. The top financial sector companies in India for investors present a broad range of opportunities, from established banks and NBFCs to innovative fintech startups and insurance providers.

However, investing in financial stocks requires more than just following market trends or recent quarterly profits. A well-informed investor should closely track factors like asset quality, capital strength, governance, and digital adoption. If you are looking to invest in the top finance sector stocks, open a demat account with Share.Market.

FAQs

1. What Metrics Should I Check Before Buying Financial Stocks?

Focus on net interest margin, NPA ratios, return on equity, capital adequacy, and dividend track record. These reveal profitability, risk, and capital strength. Also, review quarterly earnings and management outlook. Strong metrics suggest stability and future growth, especially for investors looking to hold for multiple years.

2. Are NBFC Stocks Safe for Long-term Investment?

NBFC stocks can be a suitable option for long-term growth, especially if the company has a strong balance sheet, a diversified loan portfolio, and a steady track record of profits. However, they are generally more exposed to risks like liquidity crunches, regulatory changes, and economic slowdowns compared to banks. Before investing, it’s important to review factors like asset quality, capital strength, and the management’s performance history.

3. What Are the Risks Associated With Investing in Financial Stocks?

Financial stocks are sensitive to economic conditions, interest rate changes, and regulatory shifts. Key risks include credit defaults, market volatility, and stricter lending norms. These factors can impact profitability and stock performance. Diversifying your portfolio and staying updated with financial news can help manage these risks.

4. Which Financial Stocks Are Best for Long-Term Investment in India?

If you’re looking at long-term investment in India’s financial sector, NBFCs like Bajaj Finance, Muthoot Finance, and Shriram Finance are worth considering. They’ve built a strong track record with steady growth, solid profitability, and a focus on segments like consumer lending, gold loans, and small business finance. 

5. How Can I Invest in Financial Stocks?

Investing in financial stocks involves opening a brokerage account with a registered broker like Share.Market, researching companies, and purchasing shares in India through stock exchanges. It’s advisable to assess financial health, market position, and growth prospects before investing.

Disclaimer: Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Registration granted by SEBI, enlistment as a Research Analyst with the Exchange and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. The securities are quoted as an example and not as a recommendation.

This is for informational purposes and should not be considered as recommendations. Kindly refer to  https://share.market/ for more details. PhonePe Wealth Broking Private Limited, Research Analyst with SEBI Regn No: INH000013387, BSE RA Enlistment Number: 5887.