RBI Cut Interest Rate by 25 BPS to 6.25% ??

The Reserve Bank of India (RBI) announced a 25 basis points reduction in the repo rate, bringing it down to 6.25%. This marked the first rate cut in nearly five years, aiming to stimulate economic growth. The decision led to a positive response in rate-sensitive sectors like Financials, Automobiles, and Real Estate.

The market was volatile this week because of weak global markets, stemming from concerns over U.S. President Donald Trump's implementation of tariffs on trading partners.?

This week, the Nifty 50 and Sensex rose by 0.33% and 0.46% respectively. The Nifty 50 closed above the 23,500 level while the Sensex closed above the 77,800 level.

Overall, the Indian stock market during this week was influenced by global trade tensions and domestic monetary policy decisions, leading to fluctuations across various sectors.

Stock Spotlight ??

Top Gainers ??

Godfrey Phillip - ?5,470.45 (+21.10%)

Eris Lifesciences - ?1,478.90 (+20.43%)

Castrol - ?209.80 (+18.28%)

Aegis Logistics - ?827.65 (+18.16%)

Westlife Food - ?853.05 (+17.52%)

Top Losers ??

BEML - ?3,132.40 (-18.53%)

NCC - ?207.30 (-17.84%)

Rail Vikas - ?395.05 (-17.06%)

Jupiter Wagons - ?342.05 (-14.63%)

Ircon International - ?189.20 (-14.56%)

Sectors in Focus ??

NBFCs ??

A 25 bps rate cut by the RBI to 6.25% is highly beneficial for NBFCs, as they depend on borrowed funds from banks, bonds, and commercial papers for lending. A lower interest rate reduces their borrowing costs, improving net interest margins (NIMs) and profitability.

Additionally, loan demand rises as cheaper credit encourages more borrowing in key segments like home loans, auto loans, personal loans, and SME finance. This particularly benefits housing finance companies (HDFC Ltd, LIC Housing Finance), vehicle lenders (Shriram Finance, M&M Finance), and diversified NBFCs (Bajaj Finance, Cholamandalam Investment).

A rate cut also strengthens asset quality by reducing borrower repayment burdens, lowering the risk of loan defaults and improving collections. Sectors like microfinance and commercial vehicle lending, which are sensitive to interest rates, see fewer non-performing assets (NPAs).

Additionally, falling rates drive investor confidence, often leading to NBFC stock price re-rating as FIIs and DIIs increase exposure.?

However, risks such as liquidity constraints, asset-liability mismatches, and regulatory changes remain. Overall, well-capitalized and high-quality NBFCs stand to gain the most in a rate-cut environment, making them one of the top-performing stock market sectors post-RBI policy easing.

IPO Insights ???

This week the IPO was quiet.

Only 1 IPO listed this week - Dr Agarwals’ Health Care. The IPO listed flat.

As of now, 2 IPOs are expected to open - Ajax Engineering and Hexaware Technologies. Collectively, they will raise ?10,000+ crores.

That’s all for this week.?

We’ll see you again next week ??

Happy Investing!