NBFC Stocks in the Unlisted Market

What’s an NBFC? 

A Non-Banking Financial Company (NBFC) is registered under the Companies Act of 1956 and operates in the financial sector but isn't a bank. These companies engage in activities like providing loans and advances and buying and selling investments such as shares, bonds, and other securities issued by the government or local authorities. They also deal with leasing, hire-purchase agreements, insurance, chit funds, and savings schemes where people contribute money regularly. However, NBFCs do not focus on activities related to farming, manufacturing, buying or selling goods (except for financial securities), offering services, or dealing with real estate transactions. Additionally, there is a category of NBFCs known as Residuary Non-Banking Companies, which mainly focus on collecting deposits from people through various schemes, either as lump sums or in installments.

NBFC’s in Unlisted Market

• HDB Financials 

  HDB Financial Services Ltd (HDBFS), established in June 2007, is a non-banking finance company (NBFC) and a subsidiary of HDFC Bank Ltd. HDBFS operates in two primary segments: Lending and BPO services. Lending accounts for 86% of its business, including consumer loans, enterprise loans, asset finance, and micro-lending. The remaining 14% comes from BPO services, offering collection services and back-office sales support. With a robust presence, HDBFS serves 15.5 million customers through 1,682 branches, positioning itself as a significant player in India's financial services sector.

Financial Snapshot of HDB Financials unlisted shares:

• TATA capital

  Established in 2007, TATA Capital operates as a Non-Banking Financial Company (NBFC) subsidiary of Tata Sons Private Limited. The company offers various services, including commercial finance, investment banking, and private equity. TATA Capital has a robust presence across India with 723 branches, serving a customer base of 4.50 million as of FY24. Over 80% of its loan portfolio is dedicated to retail and SME segments, reflecting its focus on broad financial accessibility. Its key subsidiaries include Tata Capital Housing Finance Limited (TCHFL) and Tata Securities Limited (TSL), which further diversify its service offerings.
  

Financial Snapshot of Tata Capital unlisted shares:

• ICL Fincorp

Incorporated in 1991, ICL is a prominent Non-Banking Financial Company (NBFC) specializing in gold loans. Registered under the gold loan sector, ICL operates over 240 branches across Kerala, Tamil Nadu, Andhra Pradesh, Karnataka, Telangana, Odisha, Gujarat, and Maharashtra. Primary business involves disbursing loans secured by household gold jewelry, with lending limits up to 75% of the gold's market value. As an asset-backed lender, ICL ensures a robust security framework for its loan portfolio. Alongside gold loans, ICL provides property and business loans and financing for new and pre-owned vehicles, diversifying our financial services to meet broader customer needs.

Financial Snapshot of ICL Fincorp unlisted shares:

• KLM Axiva Finvest

  Incorporated in 1997 as a public limited company under the Companies Act, KLM Axiva Finvest is a non-banking financial company ( registered with the Reserve Bank of India. KLM operates across four key segments: Gold Loans, MSME Loans, Microfinance Loans, and Personal Loans. Gold Loans contribute the highest revenue at 65%, followed by MSME Loans at 20%, Microfinance Loans at 12%, and Personal Loans at 3%. Operating in seven states, including Andhra Pradesh, Delhi, and Maharashtra, KLM has a total of 694 branches as of FY 2023. In January 2023, India Ratings assigned KLM Axiva Finvest’s additional NCDs and bank loans a rating of ‘IND BBB-’ with a stable outlook, reflecting moderate creditworthiness and a stable financial position.
  

Financial Snapshot of KLM Axiva Finvest unlisted shares:

• Hero Fincorp

  Hero FinCorp, incorporated in December 1991 as Hero Honda FinLease Limited, is an associate of Hero MotoCorp Limited (HCML) and one of the leading Non-Banking Financial Companies (NBFC) engaged in consumer finance businesses and commercial lending. The company claims to disburse a loan every 30 seconds. It undertakes bill discounting for HCML's vendors and suppliers, apart from retail financing of HMCL’s two-wheelers, corporate lending to mid-sized clients and SMEs, LAPs, and the operating lease business. It has also ventured in used car financing and loyalty personal loans. The company has a subsidiary named Hero Housing Finance Limited with a 99.24% stake (as of FY24) in it.

Financial Snapshot of Hero Fincorp unlisted shares:

• Utkarsh CoreInvest

  Utkarsh CoreInvest Limited, previously known as Utkarsh Micro Finance Limited, is the parent company of Utkarsh Small Finance Bank Limited. Established in September 2009, Utkarsh Micro Finance began by providing financial and non-financial services to underserved populations with skills but lacking access to capital. In FY 2016, the Reserve Bank of India granted a license to establish a Small Finance Bank, leading to the formation of Utkarsh Small Finance Bank Limited. By FY23, the bank had significantly expanded its reach to 888 branches across 26 States and Union Territories, serving over 4.5 million customers. Its network includes 320 ATMs, and 612 micro ATMs and spans 224 districts in 22 States and 4 Union Territories, supported by a team of over 16,000 employees.

Financial Snapshot of Utkarsh CoreInvest unlisted shares:

In conclusion, NBFCs such as HDB Financials, ICL Fincorp, KLM Axiva Finvest, and Utkarsh CoreInvest provide various financial services across India.

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