India's BFSI sector grows 50-fold in 20 years, market cap hits US$ 1 trillion
- IBEF
- November 4, 2025
India’s banking, financial services, and insurance (BFSI) sector has expanded 50 times in market capitalisation over the past two decades, reaching Rs. 91,00,000 crore (US$ 1 trillion) in 2025 from Rs. 1,80,000 crore (US$ 20.28 billion) in 2005, according to a study by Bajaj Finserv Asset Management Company (AMC). The sector, which now contributes 27% to India’s Gross Domestic Product (GDP) compared to 6% two decades ago, has grown at a compound annual rate of 22%, driven by strong credit growth, improved balance sheets, and financialization of savings. Banks continue to dominate with a 57% share of BFSI market capitalisation, down from 85% in 2005, as non-banking financial companies (NBFCs), fintechs, asset management companies (AMCs), and insurers gain prominence. The sector’s strong fundamentals are evident with gross Non-Performing Assets (NPAs) dropping from 5.8% in FY22 to 2.2% in FY25 and credit costs reducing from 1.3% to 0.4%.
The study highlights that BFSI stocks have consistently outperformed the broader market, with the Nifty Financial Services Index surpassing the Nifty 50 in every major recovery phase, including the 2009 post-crisis rebound, 2014 election rally, and 2021 post-COVID surge. NBFCs have emerged as key credit engines, expanding their net worth at a 15% Compound Annual Growth Rate (CAGR) and Profit after Tax (PAT) at 31.7% CAGR, now contributing 18% to total BFSI earnings. Meanwhile, India’s insurance and mutual fund industries have driven the country’s financialization journey, with life insurance Assets Under Management (AUM) reaching Rs. 61,60,000 crore (US$ 693 billion) and mutual fund AUM soaring to Rs. 75,00,000 crore (US$ 844 billion) in March 2025, up 45 times in 20 years. Bajaj Finserv AMC noted that the BFSI sector remains India’s ‘long-term alpha engine’, powering its shift from a cash-based to a capital-based economy and reinforcing its role as a key pillar in the country’s transition towards Viksit Bharat.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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