Why valuations and fundamentals make the Bajaj Finserv Banking and Financial Services Fund suitable today

The financial sector plays a crucial role in supporting India’s growth story. As the economy expands, financial institutions, from banks to insurers, are seeing structural shifts in how they operate and grow. The Bajaj Finserv Banking and Financial Services Fund aims to offer investors an opportunity to participate in this evolving sector through a diversified approach that looks beyond just banking. With valuations below long-term averages and improving fundamentals, this may be a suitable time to explore the fund.

Bajaj Finserv Banking and Financial Service Fund NFO: Closing soon

The Bajaj Finserv Banking and Financial Services Fund NFO opens on Monday, November 10, 2025, and closes on Monday, November 24, 2025. The scheme will reopen for subscription within five business days from the date of allotment.

A suitable entry point backed by fundamentals

Valuations in India’s banking and financial services sector are currently below their 14-year average, creating a potentially favourable entry point for investors looking at long-term participation. Lower valuations often indicate that market prices may not fully reflect the sector’s improving fundamentals.

At the same time, asset quality across banks and non-banking financial companies has been showing signs of improvement. With reduced non-performing assets and more disciplined lending practices, the overall health of balance sheets appears to be strengthening. This improving asset quality, coupled with stable earnings visibility, may provide a supportive environment for long-term investors.

Additionally, profitability within the sector has been healthy, aided by expanding credit demand, operational efficiency, and the growing contribution of fee-based income streams. Together, these trends point towards a sector that is steadily consolidating its financial strength.

Source: NSE Data as on Sep 30, 2025, ACE Equity PAT

Curated from structural sector trends

The Bajaj Finserv Banking and Financial Services Fund follows a curated approach, shortlisting 45–60 stocks from a universe* of around 180 – 200 companies. These companies are selected based on their alignment with long-term structural trends shaping the financial services industry.

Rather than focusing on short-term market movements, the fund’s strategy is designed to identify businesses positioned to benefit from India’s evolving financial ecosystem. This includes companies that demonstrate operational resilience, robust fundamentals, and the potential to adapt as the sector transforms through technology and innovation.

By diversifying across well-researched sectors, the fund aims to balance growth opportunities with prudent risk management, providing investors exposure to the broader financial landscape.

* The portfolio count is indicative, and actual number will depend on market conditions at the time of making investment.

Aligned with India’s BFSI megatrends

India’s financial services industry is undergoing a transformation, driven by multiple megatrends that are reshaping how people access and manage money. Digital finance continues to expand rapidly, supported by platforms such as UPI and the wider adoption of digital lending. Initiatives like Jan Dhan have accelerated financial inclusion, bringing millions of individuals into the formal financial system.

At the same time, non-banking financial companies, mutual funds, and insurance providers are seeing greater traction as more Indians seek diversified financial products. These developments have broadened the scope of the sector, making it more dynamic and inclusive than ever before.

The Bajaj Finserv Banking and Financial Services Fund seeks to align with these long-term structural drivers, providing investors exposure to businesses that may potentially benefit from this transition.

Source: MOFSL, Press Information Bureau, CareEdge

Broad-based exposure across financial subsectors

The fund’s portfolio extends beyond traditional banking. It offers broad-based exposure across multiple financial subsectors, banks, NBFCs, insurance companies, asset management companies, and other participants in the capital markets.

Such diversification helps the fund participate in various growth sectors within the BFSI space rather than relying solely on one segment of the market. By investing across different financial services businesses, the fund may aim to mitigate impact of volatility that sometimes arises in sector-specific investments.

This approach also reflects the interconnected nature of India’s financial ecosystem—where lending, investments, and insurance collectively contribute to economic progress.

Conclusion

The Bajaj Finserv Banking and Financial Services Fund aims to offer exposure to one of India’s most dynamic sectors, financial services. With valuations currently below the 14-year average, improving asset quality, and healthy profitability, the sector appears well-placed from a fundamentals perspective.

For investors looking to participate in the long-term evolution of India’s BFSI ecosystem, the fund presents an opportunity to consider. It may provide diversified exposure to multiple financial subsectors, reflecting the broader story of inclusion, innovation, and digital growth shaping India’s economy.

New Fund Offer Opens on:	Monday, November 10, 2025
New Fund Offer Closes on:	Monday, November 24, 2025
Scheme re-opens on:	Within five business days of allotment date