Top 10 Banking Stocks in India 2025
Posted by : sachet | Tue Mar 04 2025
Banking stocks in India could be lucrative but their growth depends on multiple factors. As 2024 is about to end, and we’re heading towards a new year. In the first six months of 2024, PSBs (Public Sector Banks) showed an exponential growth of 11% YoY. There is much more to come next year. Many factors are streamlined for the growth of the banking sector in India. And it is up to the investors whether they can identify such factors to generate higher returns. In this piece, we will explore the top 10 banking stocks in India and how one can create a diversified portfolio for better returns.
What are Banking Stocks?
These are the shares of business enterprises offering financial services such as deposits, loans, investments, and insurance. Over the past few years, investors enjoyed promising returns by investing in the banking stocks. Banking companies in India include investment banks, commercial banks, and insurance corporations. Such organisations contribute a major amount to economic growth.
Shares of banks provide effective capital appreciation and stability because of regulatory oversight. We know that investing in banking stocks is good, but in which stocks? These questions sometimes snatch away the opportunity from the hands of investors. Let’s have a look at the best stocks with their LTP (Last Traded Price), Market Capitalisation, and 52-week high/low.
Banking Stocks List By Market Capitalisation
| Stock Name | LTP (in ₹) | Market Capitalisation (in cr.) | 52-Week High (in ₹) | 52-Week Low (in ₹) |
| HDFC Bank Ltd. | 1,736.00 | 13,32,000 | 1,794.00 | 1,363.55 |
| ICICI Bank Ltd. | 1,244.00 | 8,82,000 | 1,362.35 | 914.75 |
| SBI Ltd. | 802.40 | 7,15,000 | 912.00 | 555.15 |
| Bank of Baroda Ltd. | 242.30 | 1,23,000 | 299.70 | 192.75 |
| PNB Ltd. | 100.60 | 1,16,000 | 142.90 | 75.60 |
| Indian Overseas Bank Ltd. | 50.95 | 96,820 | 83.75 | 38.95 |
| Canara Bank Ltd. | 97.34 | 88,700 | 128.90 | 77.80 |
| IDBI Bank Ltd. | 77.37 | 83,520 | 107.90 | 59.50 |
| Yes Bank Ltd. | 19.51 | 61,290 | 32.85 | 19.02 |
| Bank of Maharashtra Ltd. | 52.27 | 40,270 | 73.50 | 42.85 |
*Data is updated as of 19th November 2024
Factors to Consider When Investing in Banking Stocks in India
When investing in banking stocks, one should consider different factors that might have an impact on the prices. Here are some of the key factors investors should consider when exploring banking stocks to buy.
- Bank’s Financials
Assess the bank’s financial performance with the help of key indicators. These include ROE (Return on Equity), ROA (Return on Assets), NIM (Net Interest Margin), revenue, profitability, and more. Explore the bank’s financial data and select the best among them to generate higher returns in the upcoming years. Strong asset quality and stable liquidity can help organisation to sustain a competitive edge for a longer time period.
- Credit Risks
Banks generally lend money to businesses and their consumers to generate revenue. The quality of loans really matters for the profitability of the banks. When investing in the top 10 banking stocks in India, one must thoroughly overview the loan quality and non-performing assets (NPA) of the bank. Credit risk is one of the significant factors that might affect the stock prices of banks in the upcoming years.
- Technological Disruptions
In the ever-increasing technological landscape, businesses are required to integrate new technologies before their competitors. This helps them sustain a competitive edge in the market. Likewise, banks should be resilient to tech advances such as innovative ATMs, cash counting machines, software, and more. Select the stock of the bank consistently integrating such technological development into its structure to perform better.
- Compliances
Research and understand the regulation imposed by the legislative assembly and RBI (Reserve Bank of India). These authorities can change regulations as per market requirements. Consider the banking sector stocks in India that consistently implement such regulatory frameworks/compliances and alterations into their structure to safeguard against high penalties. A safe investment could reduce the risk of any uncertainties in the stock market.
Top Banking Stocks Based on 1-Year Returns
| Stock Name | 1-Year Returns (%) |
| PNB Ltd. | 28.32 |
| ICICI Bank Ltd. | 35.00 |
| SBI Ltd. | 42.33 |
| Indian Overseas Bank Ltd. | 26.58 |
*Data is updated as of 19th November 2024
Dividend Yield in Banking Stocks in 2024
| Stock Name | Dividend Yield (%) |
| Canara Bank Ltd. | 3.31 |
| Bank of Baroda Ltd. | 3.21 |
| Bank of Maharashtra Ltd. | 2.68 |
| IDBI Bank Ltd. | 1.94 |
*Data is updated as of 19th November 2024
Advantages of Investing in Banking Stocks
Over the span of 10 years, India’s banking sector recorded considerable growth at a CAGR (Compound Annual Growth Rate) of 39.5%. Thus, investing in banking stocks could be a stepping stone for investors to build wealth in the long term. But, despite capital appreciation, one can get several other benefits from investing. Explore with us.
- Dividend Payouts: As per the historical data, banks in India pay steady dividends to investors. Not only cash deposits but also the lending and investing practices of banks ensure a smooth cash flow position. Thus, it is easy for them to manage consistent dividend payouts to investors. For example, in May 2024, Canara Bank announced a dividend payout of ₹16.10 per equity share. This made it one of the popular banking stocks in Bank Nifty.
- Exposure to Other Sectors: Banks provide services to businesses associated with different sectors. Investing in the top 10 banking stocks in India could give investors exposure to other industries. If you want to make your portfolio diversified in nature, then such stocks could be among the best. You can benefit from this exposure and experience the least impact of market volatility on stock prices.
- Growth Potential: For those seeking an opportunity to generate higher returns in the long term, banking stocks in India could prove beneficial. Banks can expand their loan portfolio and introduce a new financial product to retain their customers. Their higher growth potential can benefit investors with stable dividend income and excessive returns.
- Defensive Nature: Investing in banking stocks in India has become popular because of their defensive nature during downturns. Banks show stable performance during economic fluctuations but can also experience short-term market volatility. Thus, it is one of the most effective options for investors to include in their diversified investment portfolios.
Emerging and Upcoming Trends
Trends could shape the banking industry in different ways. And investors must understand the effect of such transformations to predict the stock prices. The banking sector in India experienced significant reforms that might impact the companies. Let’s explore them together.
- Neo-Banking
The rise in digitalisation influenced neo-banks or digital-only banks. These banks do not have any physical presence and provide online services such as investment, insurance, loans, and more. This emerging trend in India’s banking sector would bring a drastic change in the traditional banking model. Some of the neo-banks in India include Freo, RazorpayX Banking Suite, Jupiter, Akudo, ZikZuk, and more. A rise in such banks can impact the stock prices of the listed companies, benefitting from their operations.
- Fintech Collaborations
Indian banks are rapidly collaborating with fintech startups to ensure smooth functioning. Fintech companies provide services such as blockchain technology, peer-to-peer lending, and payment processing to help banks provide personalised experiences to their customers. Investors in the stock market consider Fintech collaboration to be one of the significant factors that will impact the prices of banking sector stocks.
- CBDC (Central Bank Digital Currency)
CBDC is also known as digital base money issued by the central bank (RBI). It is a mode of payment that helps banks provide financial services to those who don’t have access to them. CBDC can reduce cross-border transaction costs and increase competitiveness in the banking sector in India. The inclusion of CBDC in the banking industry might affect bank stock prices.
- Government Initiatives
Government policies and initiatives back the banking sector in India. Some of the upcoming initiatives include EASE 6.O, India Post Payment Bank, law amendments, and financial wellness, which could help banks influence their productivity in the country. Also, investors will enjoy such initiatives in terms of return on their investments in banking stocks in India.
FAQs
1. Is investing in banking stocks worth it?
Ans. Yes, banking stocks not only provide capital appreciation but also influence investors with their high dividend payout structures. Investing in such stocks could be a stepping stone to generate wealth in the long term. You must conduct your own research or consult a stock advisory to make a diversified investment portfolio.
2. What are the best banking stocks to buy in 2025?
Ans. Here are the four best stocks from our list of top 10 banking stocks in India.
- HDFC Bank Ltd. (NSE: HDFCBANK)
- SBI Ltd. (NSE: SBIN)
- Bank of Baroda Ltd. (NSE: BANKBARODA)
- Indian Overseas Bank Ltd. (NSE: IOB)
3. What are the risks associated with banking stocks in India?
Ans. Banking stocks have the potential to grow in the long term, but they also come with multiple risk factors. Some of the risks associated with banking stocks in India include cybersecurity risks, credit risks, interest risks, and regulatory risks. To create a diversified investment portfolio, understand such risks and frame a strategy to eliminate them from your investment journey.
4. What are the best banking stocks in Bank Nifty?
Ans. Here are some stocks from the bank nifty index with their market capitalisation.
- IDFC First Bank Ltd. (Market Cap. ₹47,270 crores)
- PNB Ltd. (Market Cap. ₹1,16,000 crores)
- Canara Bank Ltd. (Market Cap. ₹88,700 crores)
- HDFC Bank Ltd. (Market Cap. ₹13,32,000 crores)
- SBI Ltd. (Market Cap. ₹7,15,000 crores)
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52-Week Low Stocks Today
*Data is updated as of 24th February 2025.
52 Week High Stocks Today
| Stocks | LTP (₹) | New High (₹) |
| CAMLINFINE | 161.01 | 162.8 |
*Data is updated as of 24th February 2025.
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