Best Fintech Stocks in India 2023

Financial technology is evolving rapidly globally, and India is leading the sector in many fronts, including UPI or unified payment interface. But fintech is much larger than just UPI and many Indian companies have carved a niece for themselves in the sector. Many Indian fintech stocks have emerged as multi-bagger earning respect of investors.

What are Fintech Stocks? 

Fintech stocks are companies that leverage technology to improve legacy financial services. This can include payment, savings, investment or any other kind of financial platforms, even advisory firms.  Fintech has mushroomed in Indian over the past decade, especially after the rise in internet usage and this has led to a good opportunity for investors too. 

List and overview of Top Fintech Stocks to Buy 

One 97 Communications Paytm: Popularly known as just Paytm, the company was one of the earliest entrants into the Indian fintech space and its growth attracted many marquee PE investors in the initial stage. The stock is near 52-week high and the price is above short-, medium- and long-term moving averages. It has low PE ratio and has earned upgrades on target stock price from many brokers.

PB Fintech: The company runs many popular fintech platforms such as policybazaar. The stock has seen interest from foreign investors and has also seen highest recovery from a 52-week low. However, financials of the company remain a concern. 

IIFL Finance: It is a diversified NBFC engaged in the business of loans and mortgages along with its subsidiaries. The stock is near 52-week high and the price is above short-, medium- and long-term moving averages and has seen decline in provisions in the recent past.

Central Depository Services: The company a facilitator for holding of securities in the dematerialised form and an enabler for securities transactions. The stock is near 52-week high and the price is above short-, medium- and long-term moving averages. The company has also earned upgrades on target stock price from many brokers.

Intellect Design Arena:  The company has seen rising interest from foreign investors in recent past and book value per share has also improved over the last two years.  However, weak financials and poor cash generation remain a concern. 

Infibeam Avenues: The company provides payment gateway, e-commerce and other ancillary services. The stock is near 52-week high and the price is above short-, medium- and long-term moving averages and also shown strong annual EPS growth. 

Zaggle Prepaid Ocean Services: The company provides many financial solutions and products for automation and workflows.  The stock is near 520week high and has zero promoter pledge. It is a high volume, high gain play, but weak financials remain a concern. 

5paisa Capital: The company has presence in online discounted stock broking, depository services, research, distribution of financial products, and peer-to-peer lending.  The stock is near 52-week high and the price is above short-, medium- and long-term moving averages and also shown strong annual EPS growth.

MOS Utility: The company provides digital products and services in B2C, B2B, and financial technology fields. The company has low debt and return on equity has been improving for the past two years. 

Suvidhaa Infoserve: The company provides digital facility to make payments. The stock price is above short-, medium- and long-term moving averages and return on equity has been improving since last two years. Also, the stock has low PE ratio, but its financials have come under pressure.  

Why to Invest in the Fintech Stocks in India?

With rising Internet penetration and the government’s ambitious financial inclusion plan, the domestic market itself offers a huge opportunity to fintech companies, making their stocks a good investment option. Also, many of these fintech companies are now catching onto foreign clients using the rich experience gained in India. 

Factors to Consider Before Investing in Fintech Stocks in India

Regulation: India keeps its financial sector under close watch of the Reserve Bank of India. This means fintech stocks are under strict regulatory environment, hence need to be kept close eye upon. 

Business model:  One should carefully evaluate what each company is offering in fintech, whether it is UPI, loans, depositary services or something else. Each of these have their own growth path.

Fundamentals: Investment into a stock should be done only after thorough checks into the earnings, debt and other parameters of financial health of a company. 

Competition: Invest into a company that has some kind of leverage over its peers and has gained substantial market share. 

User base: A company with a wider user base is better than one that leans heavily on few users.

Performance Overview of Fintech Stocks in India

Conclusion

According to a report by Elevation Capital and McKinsey India India’s fintech and allied industry is expected to hit $70 billion-a-year revenue by 2029-30. With a large client base at home and more abroad Indian fintech story is set to become only bigger and this augurs well for the fintech stocks listed on Indian exchanges.