Investors are searching for the Top NBFC in India to invest in 2021, just as the market is gaining momentum. As per the RBI report of 2019, they grew at 18.6% CAGR while SCB's grew at 10.7%.
They are coming of age and are showing a lot of promise for future growth.
It is a good time to invest in them as a rising tide will lift your boats soon. In this article, we discuss 5 top-performing NBFC in India worth investing in. Let's begin!
What is NBFC in India?
NBFC stands for Non-Banking Financial Company. Created under the Companies Act,2013 or 1956. Moreover, section 45-I(c) of the RBI Act states that any non-banking company which thus carries out the business of a financial institution is termed as an NBFC in India.
It acts similar to a bank as they also give loans and advances, savings and investment solutions, stock portfolio solutions, money market trading, etc.
However, they cannot offer payment and settlement solutions. Thus, they can't write checks in their name.
Subsequently, they largely cover infrastructure, MSME in India. They are thus preferred by borrowers due to their efficiency. Also, they are of 3 types, namely- Asset Companies, Investment Companies, and Loan Companies.
5 Top NBFC in India 2021
Here is a list of the best 5 performing NBFC in India for 2021,
| Company | Latest Price(July 1) | MARKET CAP in Rs. | P/E | DIVIDEND YIELD | ||||
| Power Finance Corporation Limited | 121.20 | 34,123.05 Cr. | 4.04 | 7.7% | ||||
| Shriram Transport Finance Company Limited | 1,361 | 36,158.23 Cr | 14.54 | 1.33% | ||||
| HDFC | 2,477 | 4,48,729.68 Cr. | 37.31 | 0.93% | ||||
| Muthoot Finance | 1,481.60 | 59,369.49 Cr. | 15.95 | 1.02% | ||||
| Bajaj Finance Ltd. | 5,999.40 | 3,66,593.03 Cr. | 388.69 | 0% |
1. Power Finance Corporation Ltd:
PFC is thus India's largest Non-Banking Financial and Infrastructure Company.
Moreover, it is an ISO 9001:2000 certified company. Also listed on NSE and BSE and a Navratna Company.
Currently trading at 0.54 times the book value.
Its advances growth ratio is thus 18.59% which is impressive.
It is subsequently the largest NBFC in India by Net-worth. Also, it is focused on the Indian power sector.
2. Shriram Transport Finance Company Ltd:
It was thus established in 1979. The share price is Rs 1361. Also, the current market cap is Rs 36,158.23 Cr.
Moreover, the gross sales were Rs 174215.2. BSE symbol is 511218, NSE symbol is SRTRANSFIN while the ISIN is INE721A01013.
For a 3 yr period, the stock returned -6.82% while Nifty Financial Services returned 48.3%.
Subsequently, it is has a pan Indian presence with 1799 branches and also has over 24,000 employees.
3. HDFC:
Housing Development Finance Corporation Ltd. was founded in 1977. The share price is 2477. Also, the market cap is 4,48,729.68 Cr.
Moreover, the income was 481783.8 crore in the last quarter. Furthermore, their profit margin is up by 8.03%. The advanced growth ratio is 18.45%, which is thus good.
Lastly, for a 3 yr period, the stock returned 32.5% in comparison to Nifty Financial Services which returned 48.3%.
Subsequently, it is India's biggest mortgage financier.
4. Muthoot Finance:
It was founded in 1997. Also, it is a large-cap business in the NBFC sector. Moreover, its market cap is 59,369.49 Cr.
Subsequently, for a 3 yr period, the stock returned 296.73% while Nifty Financial Services returned 48.3%.
Their profit margins are thus up by 5.96%. Lastly, their ROCE for the past 3 years is 16.40%, which is good.
Their operational income has thus increased as well. Subsequently, it serves of 2.5 lakh customers in India each day.
5. Bajaj Finance Ltd:
It was thus founded in 1987. Their market cap is 3,66,593.03 Cr.
For the last 3 yrs, ROA is 3.82% which is good. ROE is 20.29%.
Lastly, the stock returned 167.1% while Nifty Financial Services returned 48.3%.
Subsequently, it deals in SME finance, Commerical lending, Investment, and Consumer finance.
Benefits of Investing
Here are some salient benefits of investing in NBFC in India,
1. Efficient Loans: Thus, gives Loans and other credit facilities.
2. M&A facilities: Helps companies in Mergers and Acquisitions.
3. Private Education: Also, lends for private education.
4. Retirement: Provides solutions for retirement planning.
Disadvantages of Investing
NBFC in India does have some limitations,
1. No Demand Deposit: They thus can't accept demand deposits from any source or means.
2. No Deposit Insurance: Moreover, the customer is not given any deposit insurance scheme. Thus, making it risky.
Conclusion
It is never nice to miss the bus and the same goes for your chance to get wealthy. NBFC's in India is not only an important channel for providing financial services to the people, they are also great avenues for growth.
The post-pandemic market momentum is just around the corner, and non-banking financial companies are all set to gain focus with renewed spending on the cards.
Thus, it makes for an interesting option for investors to place their bets and earn big. Happy investing!
