What are small finance banks?
Small finance banks are banks which are specialised in giving low value, high volume loans to customers who neither need nor can afford the high value loans, e.g. small businesses needing weekly or monthly working capital, rural population etc. As a consequence, they are also more flexible in their approach and have a more relaxed screening process in giving loans. In general, they perform all the usual functions of a bank otherwise such as taking deposits and giving loans and credit cards.
Small finance banks and other micro-finance institutions are changing the economic landscape of rural and semi-urban India by helping money circulate for businesses in these regions.
Some of these banks have major chains and hence are big enough so that they are listed on stock exchanges – stocks of such banks can be called small finance bank stocks.
List of small finance bank stocks in India
Here is a non-exhaustive list of small finance bank stocks that you may consider investing in:
|Name of the company||Revenue (2022)|
|AU Small Finance Bank||₹6915 cr|
|Equitas Small Finance Bank||₹3997 cr|
|Ujjivan Small Finance Bank||₹3126 cr|
|Suryoday Small Finance Bank||₹1035 cr|
AU Small Finance Bank
Started as a Jaipur-based vehicle finance company and incorporated in 1996, it changed to a small finance bank in 2017 and entered the list of Fortune 500 companies in India.
Today the company is worth ₹38,703 cr and has made profit worth ₹1103 cr in 2022. In the last 3 yrs, its share price has increased by 69.06%. It has a P/E Ratio (TTM ) of 29.50 and an EPS (TTM) of 19.69.
Equitas Small Finance Bank
It was founded in 2016 and got listed in 2020. Equitas Holding is its holding company. The company has a market capitalization of ₹6205 cr and has made a profit of ₹281 cr in 2022. It has a P/E Ratio (TTM ) of 15.83 and an EPS (TTM) of 3.05. This small finance bank stock price has increased by 58.68% in the last 2 years.
Ujjivan Small Finance Bank
It has a market capitalization of ₹4925 cr but has made losses worth ₹415 cr in 2022. It has a P/E Ratio (TTM ) of 223.28 and an EPS (TTM) of 0.12.
Its stock price has increased by 12% in the past twelve months.
Suryoday Small Finance Bank
It is a small finance bank converted from a microfinance institution and is known for retail banking, MSME loans etc. It has a market cap of ₹1082 cr but has made losses of ₹93 cr in 2022. It has an EPS (TTM) of -3.55 and a P/B Ratio of 0.72. In the last 3 years, it has seen a fall in its stock price by 65.75%.
Now that you know about some of the best small finance bank stocks in India, try learning more about the Indian stock market. If interested, open a demat account with your trusted online trading platform and start trading in stocks today.
Are deposits of small finance banks covered under Deposit Insurance & Credit Guarantee Corporation (DICGC)?
Yes, the deposits of all commercial banks, including local area banks, regional rural banks, Indian branches of foreign banks and small finance banks are insured by the DICGC.
What are some of the upcoming small finance bank IPOs in India?
Capital Small Finance Bank IPO, Jana Small Finance Bank IPO and Utkarsh Small Finance Bank IPO are some of the upcoming small finance bank IPOs in India.
Are small finance bank stocks profitable?
Each stock has its own price history and trajectory. Some are profitable and some are not. Sometimes, even a profit-making firm with strong fundamentals may not show stock price growth for months. It is important that you do your own research or take the help of a broker before making any decision in this regard.
Disclaimer: This blog is exclusively for educational purposes. The securities quoted are exemplary and are not recommendatory.