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India's BFSI Sector Explodes: Deal Activity Triples in 2025, NBFCs Lead Rally

Deal activity in India's Banking, Financial Services, and Insurance (BFSI) sector surged threefold in 2025, with 30 deals totaling approximately Rs 86,000 crore. Non-Banking Financial Companies (NBFCs) like L&T Finance led a dramatic share price rally, significantly outperforming public and private sector banks. The sector is buoyed by strong credit demand, with personal loan disbursements growing 35% year-over-year in Q2 FY26. Fund houses remain overweight on banks and NBFCs, anticipating improved margins and a recovery in asset quality to drive earnings growth in FY27.

Key Points: India BFSI Deals Triple in 2025 | NBFCs Outperform Banks

  • Deal value hits ~Rs 86,000 crore
  • NBFCs lead share price rally
  • PSBs gain in home & auto loans
  • Strong personal loan growth at 35% YoY
2 min read

India's BFSI deal activity triples in 2025: Report

Deal activity in India's BFSI sector tripled in 2025, with NBFCs leading share price rallies. Explore the key mergers, acquisitions, and market trends.

"NBFCs outperformed public sector banks, large and small private banks in terms of share price movement. - Equirus Capital Report"

New Delhi, Dec 24

The number of deals in the banking, financial services and insurance space rose threefold in CY 25, a report said on Wednesday.

The report from financial services firm Equirus Capital said that the year saw 30 deals compared to 10 deals in 2024, with banks and non‑bank financial companies accounting for mergers, acquisitions and strategic deals worth Rs 42,939 crore.

Other BFSI segments recorded deals worth Rs 43,014 crore, it added.

The firm highlighted that NBFCs outperformed public sector banks, large and small private banks in terms of share price movement over the past 12 months.

On a price index set to 100, among public sector banks, Indian Bank, Canara Bank and Bank of India were the best performers at 151, 144 and 136 on the same index.

Among NBFCs, L&T Finance led the rally, nearly doubling to 204. Among large private banks, the strongest share‑price performers were IDBI Bank, IDFC First Bank and Yes Bank. Small private banks that outperformed included RBL Bank, South Indian Bank and DCB Bank, the report said.

Leading fund houses had recently said that they are overweight on banks and non‑bank financial companies (NBFCs), arguing net interest margins for banks should improve in FY27. Private banks' asset quality is expected to recover and drive mid‑teens earnings growth in FY27 after a slow FY26, a recent report said.

NBFCs are delivering strong earnings growth driven by strong credit demand and improving margins on the back of decline in interest rates, it noted.

Public sector banks gained share in personal, home and auto loans while private banks strengthened share in consumer durables, credit cards and two‑wheelers, the report said. Personal loan disbursements grew about 23 per cent and 35 per cent YoY in H1FY26 and Q2FY26 respectively, with PSBs' disbursements up 77 per cent and their market share by value rising to 36 per cent in Q2FY26.

- IANS

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Reader Comments

P
Priya S
While the numbers look great, I hope this consolidation doesn't lead to reduced competition and higher costs for the end customer. We've seen how some mergers initially promise efficiency but later result in poor customer service. The RBI needs to ensure consumer interests are protected.
R
Rohit P
PSBs gaining share in personal loans is a big shift! For years, private banks dominated that space. Maybe the trust in government-backed banks is increasing again. Good to see Indian Bank and Canara Bank performing well on the index. Solid progress.
S
Sarah B
As an investor, this report is gold. The clear outperformance of NBFCs and the specific bank names mentioned (IDBI, Yes Bank, RBL) give great pointers for portfolio allocation. The mid-teens earnings growth projection for FY27 is very encouraging.
V
Vikram M
Personal loan growth at 23-35% YoY is staggering. It shows both rising aspirations and perhaps rising costs of living? Hope people are borrowing responsibly. PSBs disbursements up 77% is a jaw-dropping number. The market is on fire.
K
Karthik V
The report is optimistic, but let's not forget the risks. Such rapid credit growth needs to be matched with robust risk assessment. We don't want a repeat of past NPA cycles. Strong earnings growth is good, but sustainable growth is better.

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