Best Halal Stocks in India: List of Shariah Compliant Shares

Last Updated on Dec 12, 2024 by Anjali Chourasiya

Halal stocks in India refer to shares of companies whose business activities comply with Islamic principles, making them suitable for investment by Muslims and others interested in ethically responsible investing. The concept of “halal” extends beyond food to include financial and business practices that are permissible under Sharia law. In this blog, we have charted down the list of halal shares in India, along with details of Shariah compliance, key principles, what makes a stock halal, and more.

What Are Halal Stocks?

Halal stocks refer to shares of companies whose activities and financial structures align with Islamic principles (Shariah law). These stocks are considered ethical investments for individuals who follow Islamic guidelines. Shariah prohibits certain industries and practices, such as those involving alcohol, gambling, pork products, and interest-based financial activities. Therefore, companies operating in these industries are excluded from the halal stock universe.

For example, halal stocks in India might include businesses focused on technology, healthcare, or manufacturing, provided they meet the required financial and ethical criteria.

What Is Shariah Compliance?

Shariah compliance means adhering to Islamic laws and principles. In the context of investments, this includes avoiding prohibited activities, maintaining ethical business practices, and adhering to specific financial guidelines. Companies must meet criteria such as avoiding high levels of debt and refraining from earning substantial income from haram (prohibited) activities.

A key resource for identifying Shariah-compliant investments is the NIFTY 50 Shariah Index, which includes a list of halal stocks in India. Investors can also refer to Shariah boards or Islamic scholars to verify compliance.

List of Halal Stocks in India (Nifty 50)

Note: The list of halal stocks in India is selected from Nifty 50. The list of Shariah compliant stocks in India is not sorted based on any criteria.

🚀 Pro Tip: Explore Tickertape’s Financial Statements for detailed company financial reports to make informed investment decisions.

Overview of the Halal Stocks in India

Reliance Industries Ltd

Reliance Industries Ltd, founded in 1973 by Dhirubhai Ambani, is one of India’s largest conglomerates with interests spanning oil and gas, petrochemicals, retail, and telecommunications. It is counted as a halal company. The company is a major player in refining and marketing, contributing significantly to India’s energy sector.

As of 11th December 2024, Reliance Industries Ltd has a market capitalisation of Rs. 1,738,706.93 cr. with a stock price of Rs. 1,284.85. The price-to-earnings (PE) ratio is 24.97.

Tata Consultancy Services Ltd

Established in 1968, Tata Consultancy Services Ltd (TCS) is a global leader in IT services, consulting, and business solutions. A subsidiary of the Tata Group, TCS is renowned for its software development and digital transformation expertise.

As of 11th December 2024, Tata Consultancy Services Ltd has a market capitalisation of Rs. 1,603,735.38 cr. and a closing stock price of Rs. 4,432.55. The PE ratio stands at 34.93.

Infosys Ltd

Founded in 1981 by N. R. Narayana Murthy and a group of engineers, Infosys Ltd is one of India’s premier IT services and consulting companies, with a strong global presence in technology and digital innovation.

As of 11th December 2024, Infosys Ltd has a market capitalisation of Rs. 807,091.29 cr. The stock price is Rs. 1,948.55, with a PE ratio of 30.77.

Hindustan Unilever Ltd

Hindustan Unilever Ltd, incorporated in 1933, is India’s largest fast-moving consumer goods (FMCG) company. It specialises in household and personal care products, including soaps, detergents, and skincare items.

As of 11th December 2024, Hindustan Unilever Ltd has a market capitalisation of Rs. 563,279.26 cr. The stock price closed at Rs. 2,397.35, and its PE ratio is 54.81.

HCL Technologies Ltd

Founded in 1976, HCL Technologies Ltd is a global technology company offering IT services, digital transformation, and engineering solutions. The company is known for its strong focus on innovation and technology-driven growth.

As of 11th December 2024, HCL Technologies Ltd has a market capitalisation of Rs. 524,002.11 cr. with a closing price of Rs. 1,936.35. Its PE ratio is 33.37.

Sun Pharmaceutical Industries Ltd

Established in 1983, Sun Pharmaceutical Industries Ltd is a leading pharmaceutical company in India, manufacturing and marketing a wide range of generic medicines, active pharmaceutical ingredients (APIs), and speciality products.

As of 11th December 2024, Sun Pharmaceutical Industries Ltd has a market capitalisation of Rs. 434,267.63 cr. The stock price is Rs. 1,809.95, and the PE ratio stands at 45.35.

Maruti Suzuki India Ltd

Maruti Suzuki India Ltd, founded in 1981, is a leader in the Indian automobile market. It is a subsidiary of Suzuki Motor Corporation and is known for its fuel-efficient and affordable four-wheelers.

As of 11th December 2024, Maruti Suzuki India Ltd has a market capitalisation of Rs. 352,074.29 cr. with a stock price of Rs. 11,198.20. The PE ratio is 26.10.

UltraTech Cement Ltd

Incorporated in 2000, UltraTech Cement Ltd is a flagship company of the Aditya Birla Group and is one of the largest cement manufacturers in India. The company produces a wide range of cement products for domestic and export markets.

As of 11th December 2024, UltraTech Cement Ltd has a market capitalisation of Rs. 338,519.25 cr. The stock price closed at Rs. 11,814.80, and the PE ratio is 48.33.

Titan Company Ltd

Founded in 1984, Titan Company Ltd is a leading Indian manufacturer of jewellery, watches, and other lifestyle products. It is a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation.

As of 11th December 2024, Titan Company Ltd has a market capitalisation of Rs. 308,314.76 cr. with a stock price of Rs. 3,475.75. The PE ratio is 88.19.

Adani Enterprises Ltd

Adani Enterprises Ltd, established in 1988, is the flagship entity of the Adani Group. The company operates in commodities trading, mining, and infrastructure development and has diversified into green energy projects.

As of 11th December 2024, Adani Enterprises Ltd has a market capitalisation of Rs. 284,759.47 cr. The stock price is Rs. 2,467.20, and its PE ratio stands at 87.90.

What Makes a Stock Halal?

A stock is considered halal if it fulfils both ethical and financial criteria, adhering to principles under Shariah law. These include:

Business Activity

The primary business should not involve industries prohibited under Shariah law, such as tobacco, alcohol, gambling, or pork-related products. Companies engaged in such activities are excluded from any halal stock list.

Debt-to-Equity Ratio

The company’s financial structure should limit reliance on interest-based debt. A commonly accepted threshold is that total debt should not exceed 33% of total assets. This is especially relevant for zero debt halal stock lists and ensures alignment with Shariah principles.

Income from Non-Compliant Activities

Revenue from non-permissible activities should not exceed 5% of total income. Stocks meeting these criteria are often included in shariah-compliant stocks in India or globally, making them part of halal investment strategies.

Ethical Practices

The company must adhere to transparent and ethical practices. Transparency is a key factor for assessing whether the share market is halal or haram.

Examples of Halal Stocks

For example, halal shares to buy in India might include stocks like TCS or Infosys, which typically meet Shariah-compliant standards due to their low debt and permissible business operations. Some investors also question, “Is the nifty 50 halal or haram?” While not all companies in the Nifty 50 are Shariah-compliant, specific stocks within the index may meet these criteria.

Investors often seek guidance on halal investment in India, exploring options like halal SIP in India or curated lists such as the halal stock list. Questions like is share market halal or is investing in the stock market halal arise frequently, but with careful analysis of financial and ethical factors, one can identify halal companies suitable for investment.

Key principles of Shariah investment

The company’s primary business must be halal (according to Islamic law – Shariah). Under Shariah law, companies engaged in gambling, alcohol, tobacco, etc., are excluded.

• The total ‘Debt to Equity ratio’ should be lower than 33%.
• Shariah indices exclude companies with Accounts Receivables/Market equity value greater than or equal to 49 %.
• In Shariah-compliant companies, revenues from non-compliant activities are permissible only if the revenue from the non-permissible income is less than 5%.
• Shariah Boards laid down these principles, and 935 companies are compliant with Shariah principles in the Nifty index.

Why Invest in Halal Stocks?

Investing in halal stocks allows you to grow wealth ethically and in alignment with your values. Here are a few benefits of investing in Shariah-compliant stocks:

Religious Compliance

For those who follow Islamic teachings, investing in halal stocks provides an opportunity to earn returns without compromising their beliefs. This ensures that the stock market is halal or haram debate can be resolved through informed decisions based on Shariah guidelines.

Social Responsibility

Many halal companies are in industries promoting positive contributions, such as renewable energy, technology, and healthcare, which align with ethical investing principles.

Transparency

Shariah-compliant stocks in India often come from companies with stringent reporting standards, ensuring that their operations and finances remain ethical and clear. This transparency makes it easier to identify whether the share market is halal or haram for specific investments.

Long-Term Growth

Many halal stocks in Nifty 50 belong to industries with consistent growth potential, such as technology and consumer goods. If you’ve been asking, “Is Nifty 50 halal?” it’s important to know that not all companies in this index are Shariah-compliant, but many meet the criteria.

How to Identify the Best Halal Stocks in India?

Identifying halal stocks requires careful screening. Consider the following steps:

1. Analyse Core Activities: Ensure the company avoids haram industries like gambling, alcohol, and conventional banking. Focus on sectors such as technology or healthcare to identify the best options for a halal share list.
2. Financial Ratios: Use tools like Tickertape Stock Screener to ensure compliance. Confirm that debt is below 33% of market capitalisation and non-halal income remains under 5%. These criteria ensure the stock aligns with the principles of Shariah-compliant stocks.
3. Refer to Shariah Indices: Consult indices like the NIFTY 500 Shariah for pre-verified stocks. This provides a reliable way to check whether the stock market is halal for specific companies.
4. Governance Practices: Look for companies with ethical governance and adherence to ESG standards. Companies meeting these standards often make their way into a reliable halal share list or portfolios centred on Shariah-compliant stocks in India.
5. Stay Updated: Follow market trends in industries typically aligned with Islamic principles, such as renewable energy or IT. Staying informed helps answer key questions like is investing in the stock market halal or how specific companies meet Shariah criteria.

These steps can help you build an ethical investment portfolio with confidence, ensuring alignment with your values and financial goals.

How to Invest in Halal Stocks?

Investing in halal stocks involves selecting companies that comply with Shariah principles. Here’s how you can proceed:

1. Direct Investment: Explore halal stocks listed in indices like the NIFTY 50 Shariah Index. These indices pre-screen companies for compliance.
2. Halal Mutual Funds: Consider funds which invest exclusively in Shariah-compliant stocks.
3. Stock Screeners: Use Tickertape Stock Screener to filter halal stocks based on financial ratios and business activities.
4. Check Financial Ratios: Verify compliance by ensuring interest-bearing debt is below 33% of total assets and non-compliant income doesn’t exceed 5%.
5. Consult Experts: Seek guidance from financial advisors familiar with Islamic investing.

By integrating these methods, you can ensure that your investments align with both financial and religious goals.

Who Should Invest in Halal Stocks?

Halal stocks can be a suitable choice for individuals who prioritize ethical investing and value adherence to specific principles. These stocks are ideal for:

1. Investors Interested in Islamic Principles: Those who aim to align their investments with ethical guidelines rooted in Islamic finance.
2. Ethical Investors: People seeking socially responsible investment opportunities that avoid certain industries and practices.
3. Long-Term Investors: Individuals looking for stable growth in sectors like technology, healthcare, or renewable energy.

Benefits of Investing in Halal Stocks

1. Ethical Investing: You can grow your wealth while adhering to Islamic principles.
2. Diversification: Shariah-compliant investments often include a variety of industries, such as technology, healthcare, and manufacturing.
3. Stable Returns: Companies meeting stringent ethical and financial standards tend to be more resilient.

No. of Shariah Compliant Halal Stocks in Nifty Index

Criteria for Non-Halal Stocks

Stocks are considered non-halal if they:

1. Operate in Prohibited Industries: Examples include alcohol production, gambling, or conventional banking.
2. Have High Interest-Based Debt: If a company’s operations rely heavily on interest, it becomes non-compliant.
3. Earn from Haram Activities: Companies deriving significant revenue from non-permissible activities are excluded.

What Are Halal Mutual Funds?

Halal mutual funds have their origins in the demand for investment solutions that align with specific ethical and financial principles. The concept first emerged in the 1980s when investors sought alternatives to conventional funds, which often included businesses involved in gambling, alcohol, and interest-based financial services. The introduction of such funds was a milestone, offering investors a way to participate in financial markets while adhering to ethical guidelines.

These funds are designed to create diversified portfolios by investing in stocks and assets that meet rigorous ethical screening criteria. Fund managers work alongside advisory boards to ensure that the investments avoid prohibited industries and meet financial thresholds, such as limiting reliance on interest-bearing debt and ensuring ethical income sources.

In India, halal mutual funds are increasingly popular among investors looking for socially responsible and compliant investment options. Regular audits by specialized boards ensure the funds remain aligned with ethical standards, giving investors peace of mind about their portfolio choices. However, before investing in halal mutual funds, it is crucial to consult a financial advisor or professional who understands the screening criteria and ethical principles to ensure the investment aligns with your personal goals and values.

Conclusion

Halal investing necessitates making investment decisions in alignment with Shariah principles. As a faith-based approach to investment management, halal investing is frequently perceived as ethical or socially responsible investing, in stocks adhering to Shariah Principles. Moreover, with the help of Tickertape stock screener, you can evaluate these halal stocks on 200 plus filters, to identify stocks aligning with your financial goals.

FAQs About Halal Stocks

Explore other popular stock collections on Tickertape –

Here’s are some of the popular stock collections across different sectors in India:

• Author
• Recent Posts

Harshit Singh

Content Strategist at Tickertape

Hey there, I’m Harshit Singh Mahey! With eight years of experience as a Content Strategist, I’ve had the pleasure of working with a Fortune 100 company and building three successful startups from the ground up.

As an investment fanatic, I’ve dabbled in early-stage startups, mutual funds, gold, stocks, smallcases, and real estate to identify which assets generate the highest ROI. At Tickertape, I’m dedicated to presenting my learning and providing insightful suggestions to help my readers make sound investment decision.

Latest posts by Harshit Singh (see all)

• List of Top Green Energy Stocks in NSE India - Dec 12, 2024
• Best Halal Stocks in India: List of Shariah Compliant Shares - Dec 12, 2024
• Best Adani Group Stocks: Adani Company Shares to Buy in NSE India - Dec 12, 2024