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Indian Banks See Market Cap Surge on Festive Demand & GST Cuts

Most of India's top 20 listed banks recorded an increase in market capitalisation during the October-December quarter, driven by improved domestic demand following GST reductions and the festive season. Smaller private-sector banks like IDFC First Bank, Federal Bank, and AU Small Finance Bank led the gains with jumps exceeding 36%. The Nifty Bank index outperformed the broader Nifty 50, rising 7.6% in the quarter amid supportive monetary policy from the RBI. S&P Global expects systemic credit growth to accelerate further in the next fiscal year, with private banks playing a key role.

Key Points: Indian Banks' Market Cap Rises in Q3: S&P Global

  • Festive demand boosted banking stocks
  • GST cuts supported domestic demand
  • Private banks led Q3 market cap gains
  • RBI rate cuts aim to spur lending
2 min read

Indian banks' market capitalisation rises in Q3 on festive demand, tax cuts: S&P Global

Most top Indian banks gained market value in Q3, led by private lenders, fueled by festive demand, GST cuts, and RBI rate reductions.

"Seventeen of the top 20 listed banks reported gains in market capitalisation - S&P Global Market Intelligence"

New Delhi, January 8

Most Indian banks recorded an increase in market capitalisation during the October-December quarter, supported by festive season demand and cuts in the goods and services tax, according to S&P Global Market Intelligence data.

Seventeen of the top 20 listed banks reported gains in market capitalisation after domestic demand improved following GST reductions announced in September, ahead of the festive season beginning with Diwali and extending through the New Year.

Smaller private-sector banks led the gains after underperforming public-sector lenders in the previous quarter. IDFC First Bank Ltd. posted a 43.8 per cent jump in market capitalisation during the quarter, moving to 13th position from 17th earlier. Federal Bank Ltd. followed with a 38.6 per cent increase, while AU Small Finance Bank Ltd. gained 36.1 per cent.

The market capitalisation rankings of the top 10 banks remained unchanged. HDFC Bank Ltd. continued as the largest Indian bank, registering a 4.4 per cent rise. ICICI Bank Ltd. retained the second position despite a marginal 0.3 per cent decline. State Bank of India increased its market capitalisation by 12.6 per cent.

Among laggards, state-owned Indian Overseas Bank and UCO Bank saw declines of 8.6 per cent and 3.4 per cent, respectively.

The Nifty Bank index, which tracks major banking stocks, rose about 7.6 per cent in the December 2025 quarter, outperforming the benchmark Nifty 50 index, which gained 5.2 per cent. As of January 5, the Nifty Bank index had risen 0.62 per cent this year, compared to a 0.29 per cent increase in the Nifty 50.

In December 2025, the Reserve Bank of India cut the policy repo rate by 25 basis points to 6.25 per cent to support lending and economic growth. The central bank has reduced rates by a cumulative 125 basis points since February 2025 amid easing inflation.

Noting brokerage firm Emkay Global report, S&P Global says overall systemic credit growth is showing signs of improvement, with lending growth accelerating from about 9 per cent in May 2025, driven by demand from micro, small and medium enterprises, trade and select retail segments.

It expects systemic credit growth in the next fiscal year, beginning April 1, to be 200-250 basis points higher than the 11.5 per cent growth estimated for the current fiscal year, with private banks contributing significantly.

- ANI

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Reader Comments

P
Priya S
Very encouraging data. The GST cuts before Diwali were a smart move that clearly boosted spending. However, I hope this growth translates to better service and lower loan rates for common people, not just higher stock prices.
R
Rohit P
HDFC Bank and SBI holding strong at the top is no surprise. But the real story is the smaller private banks. Their agility is paying off. Hope they keep this momentum and offer more innovative products for retail customers.
S
Sarah B
Interesting analysis. The RBI's rate cuts are finally showing an effect. The focus on MSME lending growth is crucial for job creation. A robust banking sector is the backbone of any developing economy.
M
Meera T
While the overall picture is positive, we cannot ignore the laggards like Indian Overseas Bank. What specific steps are being taken to turn around these PSU banks? Their performance drags down the system's efficiency.
V
Vikram M
Nifty Bank outperforming Nifty 50 is a bullish sign for the markets. The festive quarter always gives a boost, but the key is sustaining this growth. The projected credit growth for next fiscal looks promising. Time to review my SIPs! 💰

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