Choosing the right company in any sector is extremely important but when it comes to investing in NBFC stocks, it is extremely important to check on things like quality of balance sheet and parentage. There is a very clear lesson from history, if you bought Bajaj finance, wealth creation happened, if you bought DHFL then wealth destruction happened. The question would arise, why buy NBFC if it has such risks? The answer is simple, as a sector NBFC will grow at a faster rate than a number of sectors. Why will the growth be faster? Because they provide credit and credit was / is / will remain more in demand than supply. So, a provider of credit is bound to grow as the Indian economy grows
