Key Takeaways
- • Blackstone is reportedly in discussions to invest around ₹5,000 crore in IIFL Finance for a 15% stake, part of a broader wave of global capital entering India's non-banking financial company (NBFC) sector.
- • Carlyle's ₹2,100-crore investment in Nido Home Finance, announced in February 2026, and Advent International's proposed ₹2,750-crore investment for a 14.3% stake in Aditya Birla Housing Finance highlight rising private equity interest in housing lenders.
- • MUFG has agreed to invest $4.4 billion for a 20% stake in Shriram Finance, and foreign investors have committed more than $20 billion to India's banking, financial services and insurance sectors since 2025, according to a cited report.
- • Equirus Capital reported that BFSI deals tripled to 30 in 2025 from 10 in 2024, while equity funding for smaller NBFCs fell 30–35% to around $2.8–3 billion, signaling a sharply uneven investment landscape.
- • NBFC credit grew 15.4% year-on-year in September 2026 per RBI data, with retail credit up 21.9%, and NBFCs accounted for 47% of new-to-credit consumer originations as of June 2026 per a FIDC and TransUnion CIBIL report.
Summary
Global private equity firms and financial institutions are increasing their exposure to India's non-banking financial companies, which provide credit across housing, gold loans, small businesses and infrastructure. Blackstone is reportedly in talks to invest around ₹5,000 crore in IIFL Finance for a 15% stake. Other transactions cited include Carlyle's ₹2,100-crore investment in Nido Home Finance, announced in February 2026; Advent International's proposed ₹2,750-crore investment for a 14.3% stake in Aditya Birla Housing Finance; proposed acquisition of up to 41.66% of Manappuram Finance by Bain Capital-linked entities for approximately ₹4,385 crore; and a roughly ₹5,000-crore transaction involving Aseem Infrastructure Finance in which TPG, GIC and ICICI Bank have been involved.
Investor interest is tied to the specialised lending these firms perform. Housing finance companies serve affordable and mass-market segments, gold-loan lenders extend credit against pledged jewellery, small-business NBFCs serve borrowers with thin credit histories or limited documentation, and infrastructure financers fund long-term projects such as renewable energy and power transmission. According to the article, global investors favour established lenders with specialised underwriting, defined customer segments and identifiable loan-recovery mechanisms.
Investment activity extends beyond private equity. MUFG has agreed to invest $4.4 billion for a 20% stake in Shriram Finance, and SMBC invested $1.6 billion in Yes Bank. Fairfax has proposed acquiring a 60.72% stake in IDBI Bank valued at $5.6 billion, and Emirates NBD has proposed acquiring a 60% stake in RBL Bank for approximately $3 billion. According to a report cited in the article, foreign investors have committed more than $20 billion to India's banking, financial services and insurance sectors since 2025.
Industry data shows a sharp rise in deal volume. Equirus Capital reported that BFSI deals tripled to 30 in 2025 from 10 in 2024, with banks and NBFCs accounting for mergers, acquisitions and strategic transactions worth more than ₹40,000 crore. CRISIL Intelligence reported that NBFC M&A also tripled in 2025, while private equity and venture capital investment in the sector rose about 16% to roughly $5 billion. Growth has not been uniform, however: equity funding for smaller NBFCs fell 30–35% in 2025 to around $2.8–3 billion, and smaller lenders faced margin pressure, higher compliance costs and asset-quality deterioration, particularly in microfinance.
The sector's financial position has improved since earlier stress episodes involving high bad loans and liquidity pressures. The RBI's latest financial stability assessment indicated adequate capital and liquidity buffers and better asset quality. In June 2026, NBFCs reported a capital adequacy ratio of 25.41%, a Tier-I ratio of 23.58%, a gross NPA ratio of 2.50% (versus 3.09% a year earlier), return on assets of 3.37% and net interest margin of 5.39%. According to RBI data published November 6, NBFC credit grew 15.4% year-on-year in September 2026, with retail credit up 21.9% and agriculture credit up 17.8%. A joint report by the Finance Industry Development Council and TransUnion CIBIL found NBFCs accounted for 47% of new-to-credit consumer originations as of June 2026. According to S&P Global Market Intelligence, NBFC credit exceeded ₹5,500 lakh crore by March 2026, versus ₹2,700 lakh crore five years earlier, and the top 20 NBFCs averaged a 4.92% net interest margin compared with 2.91% for State Bank of India and 3.34% for HDFC Bank.
Investor interest is tied to the specialised lending these firms perform. Housing finance companies serve affordable and mass-market segments, gold-loan lenders extend credit against pledged jewellery, small-business NBFCs serve borrowers with thin credit histories or limited documentation, and infrastructure financers fund long-term projects such as renewable energy and power transmission. According to the article, global investors favour established lenders with specialised underwriting, defined customer segments and identifiable loan-recovery mechanisms.
Investment activity extends beyond private equity. MUFG has agreed to invest $4.4 billion for a 20% stake in Shriram Finance, and SMBC invested $1.6 billion in Yes Bank. Fairfax has proposed acquiring a 60.72% stake in IDBI Bank valued at $5.6 billion, and Emirates NBD has proposed acquiring a 60% stake in RBL Bank for approximately $3 billion. According to a report cited in the article, foreign investors have committed more than $20 billion to India's banking, financial services and insurance sectors since 2025.
Industry data shows a sharp rise in deal volume. Equirus Capital reported that BFSI deals tripled to 30 in 2025 from 10 in 2024, with banks and NBFCs accounting for mergers, acquisitions and strategic transactions worth more than ₹40,000 crore. CRISIL Intelligence reported that NBFC M&A also tripled in 2025, while private equity and venture capital investment in the sector rose about 16% to roughly $5 billion. Growth has not been uniform, however: equity funding for smaller NBFCs fell 30–35% in 2025 to around $2.8–3 billion, and smaller lenders faced margin pressure, higher compliance costs and asset-quality deterioration, particularly in microfinance.
The sector's financial position has improved since earlier stress episodes involving high bad loans and liquidity pressures. The RBI's latest financial stability assessment indicated adequate capital and liquidity buffers and better asset quality. In June 2026, NBFCs reported a capital adequacy ratio of 25.41%, a Tier-I ratio of 23.58%, a gross NPA ratio of 2.50% (versus 3.09% a year earlier), return on assets of 3.37% and net interest margin of 5.39%. According to RBI data published November 6, NBFC credit grew 15.4% year-on-year in September 2026, with retail credit up 21.9% and agriculture credit up 17.8%. A joint report by the Finance Industry Development Council and TransUnion CIBIL found NBFCs accounted for 47% of new-to-credit consumer originations as of June 2026. According to S&P Global Market Intelligence, NBFC credit exceeded ₹5,500 lakh crore by March 2026, versus ₹2,700 lakh crore five years earlier, and the top 20 NBFCs averaged a 4.92% net interest margin compared with 2.91% for State Bank of India and 3.34% for HDFC Bank.
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