Top 5 Small Finance Bank Stocks in India

Published on December 22, 2025 | 4 min read

At 1:43 PM, Utkarsh Small Finance Bank shares were trading at ₹22.44 apiece on NSE, jumping 2.94%. Image: Shutterstock

Small Finance Banks, also known as SFBs, were established in India to offer financial services to small businesses and low-income households with little to no financial resources or support.

Small Finance Bank stocks can be a good investment for investors seeking high-growth potential stocks and who want to diversify their portfolio. Let’s explore the top 5 small finance bank stocks you can invest in based on market capitalisation.

Top 5 Small Finance Bank Stocks in India Based on Market Capitalization

Since Small Finance Banks provide credit to underserved rural and suburban markets, they have high interest margins. This increases their profitability which attracts investors seeking high-return potential investments.

The following are the top 5 Small Finance Bank stocks you can invest in based on their market capitalization.

S.No.	Name	CMP (₹)	Mar Cap (₹ Cr)
1.	AU Small Finance Bank	979.65	73173.18
2.	Ujjivan Small Finance Bank	54.17	10500.62
3.	Equitas Small Finance Bank	59.76	6816.90
4.	Jana Small Finance Bank	417.50	4395.15
5.	Utkarsh Small Finance Bank	15.35	2731.53

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AU Small Finance Bank Ltd

AU Small Finance Bank Ltd is India’s largest Small Finance Bank and is headquartered in Jaipur, Rajasthan. It was earlier a Non-Banking Financial Institute and later transitioned into a licensed bank in April 2017.

AU Small Finance Bank Ltd has shown consistent profit growth in the last 10 years with a market capitalization of ₹73,173 crores.

Ujjvan Small Finance Bank Ltd

Ujjvan Small Finance Bank Ltd (USFB) is a premier Indian small finance bank offering financial services to underserved segments. It was established in 2017 by Ujjivan Financial Services Ltd and has 750+ branches across India. Ujjvan Small Finance Bank Ltd provides retail banking, microloans and loans to MSMEs in rural and suburban areas.

Ujjvan Small Finance Bank Ltd has a market capitalization of ₹10,500.62 crores and has a huge customer base, strengthening its market position.

Equitas Small Finance Bank Ltd

Equitas Small Finance Bank Ltd evolved from Equitas Holdings and transitioned into a small finance bank in 2016. It focuses on providing financial inclusion and empowering underserved communities with digital-first banking, diverse loans, and transparent services.

Equitas Small Finance Bank has a market capitalization of ₹6,991 crores and offers regular dividends to its shareholders, maintaining a good dividend payout ratio of 37%.

Jana Small Finance Bank Ltd

Jana Small Finance Bank Ltd is the fourth largest small finance bank in India with roughly 4.2-12 million customers across India. It was established in 2006 and is headquartered in Bengaluru.

Jana Small Finance Bank Ltd has a market capitalization of ₹4,395 crores with consistent profitability and has delivered a good profit growth CAGR of 72.4% over the last 5 years.

Utkarsh Small Finance Bank Ltd

Utkarsh Small Finance Bank Ltd was established in 2016 and offers various financial services to rural and semi-urban areas. Utkarsh Small Finance Bank Ltd recorded the fastest Asset Under Management growth rate among all small finance banks in India.

The bank launched its IPO in 2023 and now has a market capitalization of ₹2.731 crores.

Factors Influencing Small Finance Banks in India

Before investing in Small Finance Bank stocks, you need to understand the different factors that influence them. The following are some factors that significantly impact the stock prices of Small finance banks in India.

Non-Performing Assets

Since small finance banks lend loans to micro-enterprises and low-income groups, it is necessary to monitor and assess NPA levels. A rise in NPA levels during economic downturns can negatively impact stock prices.

Net Interest Margins (NIM)

Small finance banks have high-interest margins as they offer unsecured loans to unserved segments, but they need to balance it with their operating costs. You can assess ratios such as Return on Assets (ROA) and Return on Equity (ROE) to measure the bank's operational efficiency.

Deposit Growth

The small finance bank's ability to increase deposits and maintain a high Current and Savings accounts ratio reduces its reliance on expensive wholesale funding, i.,e short-term borrowings from other banks and big corporations.

RBI’s Policies

Small finance bank stocks are significantly influenced by the RBI’s policies and have to strictly adhere to its norms, such as maintaining a Capital Adequacy Ratio of 15% or above.

Small finance bank stocks are high-growth potential investments and can be a good portfolio diversifier. Before investing, evaluate the bank's fundamentals such as NPA (Non-Performing Assets), capital adequacy ratio and Net-Interest Margin along with its past performance.

About Author

Mariyam Sara

Sub-Editor

holds an MBA in Finance and is a true Finance Fanatic. She writes extensively on all things finance whether it’s stock trading, personal finance, or insurance, chances are she’s covered it. When she’s not writing, she’s busy pursuing NISM certifications, experimenting with new baking recipes.

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