BFSI now buys 27% GDP and 38% of Nifty: ICICI Bank, Shriram Finance Top

The history of India’s banking and financial services (BFSI) has been transformed at a historic hemp pace operated by digitalization, regulatory reforms and the emergence of Fintech. In the last two decades, the market capitalization of the area has increased more than 50 times to 91 trillion in 2025 ranging from 1.8 trillion to 91 trillion – for 27% of India’s GDP.

Not only did this growth redirect the field design, but also increased its important in equity markets. BFSI now includes 38% of the Nifty -50 index, which is higher than 5% in 2004. While banks continue to create a backbone in the sector, their share in the total BFSI market cap has dropped from 85% to 57%, making room for NBFC, insurance, capital markets and fintech players.

Private banks have made their credit market shares 43% in FY 25, which is more than 21% in the financial year 14, which has been fueled by retail credit, technical -based distribution and best wealth quality. PSU banks, after losing 20% ​​shares between the financial year 11-221, limits further loss to 400 basis points due to improved capitalization and profitability.

Retail credit penetration has increased significantly, retail credit to GDP increased from 9% in the financial year to 18% in the financial year 25, fintech adoption, better underwriting models and disposable income increased. Meanwhile, per capita deposit accounts have been three times in 15 years, with Jan Dhan Yojana and digital push.

UPI -led digital payments have redefined the transaction habits – UPI is now% #% of digital transactions in FY 21% 68%, which is worth 5% of GDP. Fintex has become integral, with 10% of additional BFSI market caps over 20-25, while the combined evaluation of key unlisted BFSI companies is ~ INR 10 trillion.

Acute turnaround in property quality – GNPA 11.2% in Fiscal Year 1 and NNPA. Has declined, and NNPA. As India’s financialization is high, BFSI is an attractive long -term investment theme, powered by technical, inclusion and developed customer needs.

ICICI Bank: Buy | Target Rs. 1600 | LTP RS 1404 | Side Ltd 14%

ICICI Bank reported a healthy Q4 performance with BAT 6 126B (5% bit, 18% Yoy growth), which costs strong nymphs, healthy other income, controlled provisions and operating. ICICI Bank has increased by 16 BP QQA 4.41% to 11% YO NII with NIM. Net progress increased 13%, while deposits increased by 14%.

Safe wealth quality without stress signals remained stable (Ext. Agri), GNPA ratio improved.

We have upgraded our earnings estimates for the financial year 26/FY27 by 2.5%/4.2% for the FY 26/FY27. We guess the ROA/ROE of 2.3%/17.5% in FY 27 this way. ICICI is our top choice in this field.

Sriram Finance: Buy | Target Rs. 775 | LTP RS655 | Side Ltd 18%

SHFL is in good shape to earn a recovery procurement in vehicle finance, especially demand for commercial and passenger vehicles.

With a varied credit portfolio, the company will benefit from low borrowed costs, which will increase net interest margins and profitability. The diversified product suite helped it reduce CV business cycling.

Its strong focus on wealth quality and storage efficiency indicates that it is well prepared to explore a developing credit environment. We expect 18%/19% AUM/Pet CAGR on FY 24-27.

(Author Head – Research, Property Management, Motilal Oswal Financial Services Limited)

(Connection: The recommendations, suggestions, views and views of the experts are their own. This does not represent opinions of economic time)