Top 10 NBFCs in India (Non-Banking Financial Companies)

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Topmost Best NBFC Companies in India

Non-Banking Financial Companies, which are also called shadow banks, are popular due to their low cost of transaction and easy accessibility. They are particularly widespread in developing economies like India. In fact, NBFCs in India form the third largest segment in the financial sector.

So, what are these NBFCs and how are they different from banks? Learn more about them in the given below sections. Also listed are top NBFCs in India based upon their market capitalization.

What are NBFCs?

NBFCs are companies that do not have a banking license but are engaged in financial services that are similar to banks. These companies can provide loan facilities to help people purchase assets or they can use public funds for investment in securities market.

Read: Top 10 Microfinance Companies in India: Best MFI Guide

Importance of NBFC in India

NBFCs have seen a steady rise in India mainly due to its quick loan disbursement service. In 2018 itself NBFCs have shown a credit growth percentage of 19.6. In the same year Banks have shown a credit growth rate of just 10%.

Another reason for their popularity is that they cater to niche areas like infrastructure loan and personal loan disbursement.

They also have a better reach in rural areas than scheduled banks.

Currently there are more than ten thousand NBFCs in India registered with the RBI.

Types of NBFC

NBFCs are generally categorized according to the financial activity they perform. Here are the various types of NBFCs activity wise:

  • Asset finance company
  • Investment company
  • Loan company
  • Micro finance institution
  • Infrastructure finance company
  • Core investment company
  • Infrastructure debt fund company
  • NBFC factor

NBFCs are also divided on the basis of their size and liability type.

Depending upon the liability type NBFCs are divided as deposit and non-deposit accepting companies. Deposit accepting companies as the name suggests accept deposit from their customers. Non-deposit accepting companies raise funds through the markets.

Non-deposit accepting NBFCs are further divided into systematically important companies if they have an asset size of more than five billion rupees.

NBFC-ND-SI i.e. NBFCs that do not accept deposit but have an asset size greater than 5 billion rupees hold the major chunk of the total asset owned by all types of NBFCs in India.

So, which are these NBFCs that hold a dominant portion of the market segment? Given below is such a list of NBFCs in India that are doing extremely well and have been able to survive various ups and downs of the market.

List of Top 10 NBFC Companies in India

  1. Bajaj Finance

Indias leading NBFCs

Bajaj Finance is an NBFC-D type, which means that it is a Non-Banking financial company that takes deposits. It is one of India’s leading NBFCs.  

Bajaj Finance actually started out as Bajaj auto finance in the year 1987. The company mainly focused on providing finance to two wheelers, cars, trucks and leasing out equipment. Later on the company started providing business and property loans too.

Currently, the company deals in providing loans to small and medium enterprises, commercial and retail customers. The company has its branches all across India, in rural as well as urban areas.

In the financial year 2018-2019, the company saw an unprecedented growth and has registered a 41% growth in its assets and 60% growth in its profits. The company has also registered an increase of 14% in banking credit.

In the long list of NBFCs Bajaj finance has shown the highest increase in its market capitalization making it the best NBFC Company in India.

Bajaj Finserv is the parent company of Bajaj Finance. It holds 58% stake in Bajaj finance. Previously Bajaj Finserv was also NBFC-ND-SI, but recently it gave away its license stating that it is now a “core investment company” and does not hold any public deposits.

  1. HDB Financial Services

List of Top 10 NBFC Companies in India

HDB is one of the Topmost NBFCs in India. HDB is part of Housing Development Finance Corporation Ltd (HDFC). Another subsidiary of HDFC is the HDFC Bank that was started in 1994.

It was established in 2007 with the aim of catering to the financing needs of businesses and individuals.

HDB has its branches in 22 states and 3 union territories of India.

The company is one of the leading NBFCs in India and has been given a rating of AAA by CRISIL.

HDB has shown a consistent performance throughout the years. In the financial year ending 2018 the company has recorded a 36% increase in its profits and 24% increase in its revenue.

Read: Top 10 Best Cooperative Banks in India

  1. Muthoot Finance

Indias first NBFC

Muthoot Finance Ltd. is a systematically important non-deposit taking NBFC. It started as a gold financing company in 1939 making it India’s first NBFC.

The company specializes in providing finance to individuals and businesses by securing their gold jewelry. This type of loan is called gold loan. Apart from this service the company has also ventured into wealth management, money transfers and foreign exchange services.

The company has registered a 42% increase in its profit and 32% increase in its income in the year Sep-2018 to Sep-2019. Muthoot Finance is one of the most trusted brand names in the financial services sector.

  1. LIC Housing Finance

biggest NBFCs in India

LIC housing finance is one of the biggest NBFCs in India, having started its operations way back in 1989. As the name suggests the company specializes in home loan services.

The company also provides loans for purchasing office or clinic space property. It also provides loan for buying equipment.

The company has shown a consistent performance and had reported a 16.7% growth in its net profit for the fourth quarter of the FY 2018-2019.

With its huge reserves LIC housing finance has shown considerable resilience in the face of demonetization. Where the stocks of its competitors like Dewan and Indiabulls plunged post note ban, LIC housing finance stocks hardly showed any fluctuation.

NBFCs venture into areas where banks either do not want to invest or are slow to provide loan. Sometimes, such risky ventures boomerang resulting in loss for an NBFC. It can lead to a liquidity crisis where an NBFC is unable to disburse loans further.

  1. Manappuram Finance

Popular Non-Banking Financial Companies

Like Muthoot finance, Manappuram Finance is also a gold loan finance company. The company was founded in 1949. It is the first company in Kerala to have registered itself as NBFC with the RBI.

The company has diversified its operations and now deals with foreign exchange activities too.

The company has always shown consistent growth. Recently, the company registered a 35% growth in its Q1 profit in the FY 2019-2020.

Also See: 20 Honest Ways to Improve Your Finances

  1. Capri Global Capital

importance of NBFC in India

Capri Global Capital is a non-deposit taking NBFC. The company was incorporated in 1994. It was initially known as Dover securities Ltd, and then it was named Money Matters Financial service and finally Capri Global.

The company provides funds to MSME and Retail enterprises. It also provides housing finance.

The company has reported a jump of nearly 50% in its total income from last year. The company’s profit after tax has also increased by 77% in the FY 2018-2019 making Capri Global the fastest growing NBFC in India.

  1. JSW Holdings

Good NBFCs in India

JSW NBFC is part of the JSW group. It was incorporated in 2001. The company invests mostly in the steel companies of the JSW group.

The company has shown a 20% increase in its total income and 29% increase in its profit after tax for the FY 2018-2019.

Despite the grave situation of NBFC stocks in the last year, JSW Holding stock gave a return of 56% making it one of the most promising NBFC.

  1. L&T Finance

reliable NBFC in India

L&T Finance Ltd is a well-known NBFC in India that provides real estate finance, two-wheeler finance and farm equipment finance. The company was started in 1994.

The net profit of the company rose by 94% in the Q4 of FY 2018-2019 making it one of the most reliable NBFC in India.

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  1. M&M Financial Services

Leading Non Banking Financial Companies

Mahindra & Mahindra financial services is an asset finance deposit taking rural NBFC that provides various types of rural financing. It is spread across most of the villages in India and has more than 4 million customers.

The company has posted an impressive 87% increase in profit in Q4 of 2018-2019.

The company has been able to survive the NBFC crisis by increasing its customer base and diversifying itself geographically.

  1. Paisalo Digital

Best Non-Banking Financial Companies in India

Paisalo Digital is a non-deposit taking category B NBFC that was incorporated in 1992 as SEIL Microfin Limited. The company is engaged in providing loans to businesses in the range of 10 Lakhs to 5 Crore. The company also provides personal loans and income loans.

The company has shown a steady increase in its income and profit after tax throughout the years. The company has more than 100 offices spread across 10 states.

Top 10 Non-Banking Financial Companies in India

This list of NBFCs is prepared based upon two factors:

  • A consistent performance, increase in profits and income throughout the years, a good loan disbursement rate.
  • Ability to sail through crisis, like the recent liquidity stress faced by the NBFCs caused due to note ban and IL&FS defaults.

If you want to choose an NBFC for your personal or business loan then make sure that you also select a well-managed NBFC like the ones listed above.

Apart from the companies listed above, there are other leading (NBFCs) Non-Banking Financial Companies too that are adding to the growing scenario of financial services in India. These include:

  • Cholamandalam Finance Company Ltd.
  • Shriram Transport Finance Company Ltd.
  • Motilal Oswal Financial Services Ltd.
  • Reliance Capital Limited
  • Sundaram Finance Group
  • Power Finance Corporation Ltd.
  • Indiabulls Housing Finance Limited
  • Tata Capital Financial Services Ltd
  • Aditya Birla Finance Limited (ABFL)
  • Capital First Ltd.
  • India Infoline Finance Ltd.
  • Fullerton India Credit Co. Ltd.
  • Magma Fincorp Limited
  • Vistaar Financial Services Pvt. Ltd.
  • JM Financial Services Limited
  • IL&FS Financial Service Limited
  • Aditya Birla Finance Limited (ABFL)
  • Axis Finance Limited
  • GIC Housing Finance Ltd
  • Can Fin Homes Ltd
  • Citicorp Finance (India) Limited
  • PNB Housing Finance Ltd
  • Poonawalla Fincorp Limited
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