NBFCs Get a Boost from RBI Policy Shift

India’s non-banking financial companies (NBFCs) are set to benefit from RBI’s decision to lower risk-weights on bank lending to NBFCs from 125% to 100% starting April 1. This makes funding cheaper and more accessible, easing liquidity constraints that had slowed bank lending to NBFCs to 6.7% in Dec 2024 (half the previous year’s rate).

Key beneficiaries include M&M Financial and Cholamandalam Investment, which rely on banks for nearly 50% of their borrowings. Meanwhile, Bajaj Finance and Shriram Finance (less dependent on banks) may see a smaller impact.

However, asset quality remains a concern. M&M Financial’s bad loans rose to 2% in Q3FY25, pushing its stock down 3% over the past year, while Cholamandalam, with stronger financials (21.6% RoE), saw its stock rise 30%. Investors remain cautious—Cholamandalam trades at 3.9x FY26 book value, while M&M Financial lags at 1.6x.

The big question: Will NBFCs pass on the cost benefits to customers, and will this policy shift be enough to revive growth?

UltraTech Cement’s C&W Entry Rattles the Market

UltraTech Cement’s ₹1,800 crore foray into the cables & wires (C&W) industry has triggered sharp stock declines in Polycab, KEI, Havells, RR Kabel, and Finolex Cables (5-20%).

The move draws parallels with Grasim’s entry into paints, which eroded valuations of incumbents. Unlike paints (an oligopoly), C&W is fragmented, making market share gains difficult. UltraTech lacks a strong distribution network, adding to execution challenges.

With existing players already expanding capacity, overcapacity risks loom. If UltraTech pursues aggressive pricing, margins could suffer. Analysts estimate UltraTech could capture 5-7% of the market by FY29 (projected industry size: ₹1.3 trillion).

Interestingly, UltraTech’s own stock fell 5%, as investors question its capital allocation strategy—cement or diversification?

Amazon Unveils First Quantum Computing Chip, Ocelot

Amazon Web Services (AWS) has launched Ocelot, its first quantum computing chip, aimed at reducing error rates by 90%. This marks a key step toward practical quantum computing, a field dominated by Google, Microsoft, and Amazon.

Microsoft recently claimed a breakthrough in quantum matter, while Google’s Willow chip tackled error correction in December. Amazon’s approach mirrors Google’s focus on superconducting quantum circuits, while Microsoft takes a different route.

Ocelot is still a prototype, not a full system. While quantum computers promise massive computational power for applications like drug discovery and cybersecurity, commercial viability remains years—if not a decade—away. Analysts call this an advancement, not a breakthrough, but note that Amazon’s new method for error correction could help it catch up.

Beyond hardware, Amazon is also expanding its quantum services, including its Braket cloud platform and business advisory programs. The road to quantum supremacy remains long, but Amazon is moving closer.

Lodha Family Feud Intensifies Over Brand Name

Manju Lodha, matriarch of the Lodha real estate empire, has intervened in the legal battle between brothers Abhishek and Abhinandan Lodha, stating that neither can claim rights over the other’s business.

The dispute stems from a 2017 family agreement that split the empire. Abhishek leads Macrotech Developers (₹1.19 trillion market cap), while Abhinandan launched The House of Abhinandan Lodha after exiting the family business in 2015.

Macrotech took legal action in January to prevent Abhinandan from using the Lodha name, citing brand confusion. With the next Bombay High Court hearing on March 21, the battle over legacy and business identity continues.

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