Invest In India's Financial Growth With Bajaj Finserv Fund

The Bajaj Finserv Banking and Financial Services Fund offers a unique investment opportunity in India's growing digital finance landscape. With the NFO closing soon, investors can gain exposure to key financial sector trends.

NFO closing soon: Invest in how India earns, saves, and spends with Bajaj Finserv Banking and Financial Services Fund

India’s financial system is undergoing a transformation. From UPI transactions and digital lending to Jan Dhan accounts reaching millions of households, the way people access and use financial services is changing. This shift is creating new opportunities for those looking to participate in the country’s financial growth.

Sources: The Economic Times, Reuters, The Times of India (Jul–Aug 2025)

The Bajaj Finserv Banking and Financial Services Fund, an open ended equity scheme, seeks to invest in companies that are part of this evolving financial ecosystem. The New Fund Offer is currently live, having opened on Monday, November 10, 2025, and will close on Monday, November 24, 2025. The scheme will reopen for subscriptions within five business days after allotment.

Understanding India’s digital finance growth

Digitalisation is changing how financial services reach households. UPI has made transactions simpler, while fintech companies are expanding access to credit and investments. Between FY21 and FY25, UPI transaction value increased almost five times—from Rs. 41 trillion to Rs. 236 trillion, showing the speed and scale of adoption.

Digital lending is also extending beyond large cities. By FY28, Tier 2 and smaller cities are expected to account for over 80% of digital lending disbursements, estimated at around USD 60 billion. These developments suggest that financial services are becoming more widely accessible.

Source: Mobikwik RHP, Redseer

Financial inclusion supporting economic growth

Over the past decade, financial access has reached more households across India. The number of Jan Dhan accounts increased nearly 18 times, from 33 million in FY14 to 540 million in FY24—with deposits totalling Rs. 2.3 trillion. These accounts have supported government benefit transfers and expanded access to formal banking.

For investors, this trend indicates growing demand for credit, insurance, and investment products, creating potential for companies in the banking and financial services sector to benefit.

Sources: Reserve Bank of India, Periodic Labour Force Survey (2023), GSMA (2023)

Sector fundamentals and performance

The BFSI sector has grown significantly over the last two decades, with market capitalisation rising from Rs. 1.8 trillion in 2005 to Rs. 91 trillion in 2025. This growth reflects improvements in banks, NBFCs, insurers, and capital market intermediaries.

Banks have reduced their Gross Non Performing Assets (GNPA) from 5.8% to 2.2% and lowered credit costs from 1.3% to 0.4%. NBFCs have seen a ~32% CAGR in profit after tax over FY21–FY24, highlighting increasing operational efficiency.

Sources: Reserve Bank of India, Boston Consulting Group Report, MOFSL (Apr 2025)

Why digital finance may influence sector opportunities

The shift to digital financial services is creating new business areas. Fintech innovation is providing credit and financial products to first-time borrowers, small businesses, and underbanked consumers. With wider smartphone and internet access, financial services are becoming a part of everyday life, including bill payments, savings, insurance, and investments.

For investors, companies that operate across digital payments, lending, insurance, and wealth management may experience growing participation as these trends continue.

How the Bajaj Finserv Banking and Financial Services Fund aligns with this growth

The Bajaj Finserv Banking and Financial Services Fund invests across banks, NBFCs, insurers, asset managers, and capital market intermediaries. Its portfolio* of 45–60 stocks is selected from a larger BFSI megatrend universe of around 180 - 200 companies, focusing on structural trends such as digital adoption, financial inclusion, and formalisation of savings.

*The portfolio count is indicative, and actual number will depend on market conditions at the time of making investment.

Valuations in the sector are below their 14-year averages, while asset quality and earnings visibility have improved, potentially offering a suitable entry point for investors seeking exposure to India’s evolving financial ecosystem.

Source: National Stock Exchange, ACE Equity (Data as on Mar 31, 2024)

Considering it within a mutual fund portfolio

For investors building a diversified portfolio, the Bajaj Finserv Banking and Financial Services Fund may offer targeted exposure to the BFSI sector. As a sector-focused fund, it may suit those with a medium- to long-term horizon and a willingness to accept higher sector-specific risks.

As with any mutual fund, returns will depend on market and sector performance. The fund is one way to consider participation in structural trends across India’s financial system.

Conclusion

India’s digital finance transformation is changing how households access credit, insurance, and investments. The Bajaj Finserv Banking and Financial Services Fund invests in companies that are part of this change, including banks, NBFCs, insurers, and capital market intermediaries.

Investors may consider this fund to align with long-term structural trends in digital finance, while recognising that outcomes are not guaranteed. The fund offers an opportunity to participate in India’s evolving financial ecosystem with potentially stable, long-term exposure.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.