Looking at the BFSI sector
India is projected to become a USD 7.3 trillion economy by 2030. The financial ecosystem supports this expansion by enabling savings mobilisation, credit growth, and digital access. For India’s GDP to reach USD 30 trillion by 2047, financial assets would need to expand nearly 20 times. This implies that India’s banking system may require an estimated USD 4 trillion in additional capital over the next two decades to support credit growth and investment needs.
At the same time, the Banking, Financial Services and Insurance sector has been evolving rapidly:
1. Banks now account for 57% of the sector’s market capitalisation, compared to 85% two decades ago.
2. The sector’s weight in the Nifty 50 index has increased 2.6 times - from 14.6% in FY04 to 37.9% in July 2025.
3. Prominent financial groups have diversified into insurance, asset management, and fintech, signalling the sector’s expanding scope.
Source: MOFSL, NSE data as on July 31, 2025 PIB, Bloomberg, IMF, World Bank, CEBR estimates
What are Banking and Financial Services Funds?
These are sectoral equity schemes that invest primarily in companies operating across banking, insurance, non-banking finance, asset management, fintech, and related financial services. Such schemes aim to capture opportunities arising from financial deepening, inclusion, and digitalisation trends shaping India’s economy.
About the Bajaj Finserv Banking and Financial Services Fund
The Bajaj Finserv Banking and Financial Services Fund is an open ended equity scheme investing in companies that are part of India’s financial ecosystem. The fund seeks to identify businesses that align with long-term structural trends in the BFSI space and may benefit from sectoral growth over time.
The portfolio construction follows a multi-step process*:
INQUBE universe – a broad stock universe of around 1,100 companies.
Megatrend filter – identifies large structural shifts in the economy.
BFSI megatrends universe – narrows this down to about 180–200 companies.
Final portfolio – 45–60 shortlisted companies aligned with long-term BFSI themes.
*The portfolio count is indicative, and actual number will depend on market conditions at the time of making investment.
Key differentiators of the Bajaj Finserv Banking and Financial Services Fund
Broad-based exposure
The fund invests across banks, NBFCs, insurers, AMCs, and other capital market participants - providing exposure beyond lending-focused businesses.
Aligned with India’s BFSI megatrends
The scheme is designed around multiple structural themes such as:
Digitalisation: UPI and digital payments continue to expand financial access. Non-cash transactions among Indian households are expected to rise from 38% in FY23 to 62% in FY28.
Financial inclusion: The number of Jan Dhan accounts has grown nearly 18 times over the last decade - from 33 million in FY14 to 540 million in FY24, with total deposits reaching Rs. 2.3 trillion. These accounts have supported direct benefit transfers across schemes.
Demographics: With over 40% of India’s population below 25 years of age, the growing working-age population and rising income levels are expanding demand for credit, insurance, and investment products.
Fintech innovation: Fintech-led lending continues to enhance credit access, especially for new-to-credit borrowers and women entrepreneurs.
Valuations and outlook: Valuations within the BFSI sector remain below 14-year averages, while asset quality and earnings visibility have improved.
Source: PIB, World Bank, MOFSL, Union Ministry of Finance, UN Population Division
Why consider a Systematic Investment Plan
Investors looking to participate in India’s long-term financial growth story may consider starting a Systematic Investment Plan (SIP) in the Bajaj Finserv Banking and Financial Services Fund. An SIP allows you to invest a fixed amount at regular intervals and may help manage market volatility through rupee cost averaging.
You may use an SIP Calculator to plan your monthly contributions and understand how your investment could progress toward your long-term financial objectives. The calculator is an aid, not a prediction tool. It provides only an indicative picture based on assumed rates of return.
Conclusion
India’s economic transformation is being supported by a financial system that is becoming more digital, inclusive, and diversified. The Bajaj Finserv Banking and Financial Services Fund offers an avenue to gain exposure to these long-term structural trends. Investors may consider this scheme as part of a diversified portfolio, in line with their financial goals and risk appetite.
Source: PIB, Bloomberg, IMF, World Bank, MOFSL, NSE, Union Ministry of Railways, UN Population Division, CEBR
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