GVSRwealth - Investing Perspectives - BFSI Sector - India - May 2023

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• The Banking, Financial Services, and Insurance (BFSI) Sector is an important sector to understand from a Stock Market perspective. For example, the BFSI sector has about 37% -40% weightage in the overallNifty50 Index, which a broader market index in India.

• BFSI sector in India is undergoing a transformation like never before, with heavy focus on digital. Forexample, India recorded about 91.92 billion digital transactions for FY 2022-23 (9m, till Dec 2022-source RBI), which is the highest in the world. Technology adoption in BFSI sector is likely to improve the access to credit to Micro, Small and Medium Enterprises (MSMEs) in India in a big way, which is likely to have a positive impact on the Indian economy. For example, MSMEs employ about 40% of India’s workforce and contribute to 45% of India’s manufacturing output and 40% of India’s exports, approximately.

• From an Investing perspective, it helps to understand the key segments and themes that constitute the BFSI Sector in India. An illustrative view is given in Table 1 below.

Key Market Segments and Themes in BFSI Sector – India: Illustrative

             

        A. Banking:(Sub-segments & themes)

                A.1 Private Sector Banking Services

                A.2 Public Sector Banking Services

        B. Financial Services: (Sub-segments & themes)

                B.1 Fintech - Services

                B.2 Micro & Small Finance - Lending 

                B.3 Non-Bank Finance (NBFCs) - Lending

                B.4 Housing Finance Lending

                B.5 Wealth Management Services

                B.6 Infrastructure Finance Lending

                B.7 Credit Rating Services

                B.8 Stock Broking / Share Mkt Services

        C. Insurance: (Sub-segments & themes)

                C.1 Life Insurance Services

                C.2 Health Insurance Services

                C.3 Motor Vehicle Insurance Services

                C.4 General Insurance Services

Disclaimer: This article is provided for information purposes only. All Investments in securities market are subject to market and business risks. Please read all the related documents carefully, before investing. SEBI registration as Research Analyst (RA) or certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.