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    Impact of Union Budget On Capital Market

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    Amit Doshi
    The document provides an overview and analysis of the key aspects of the 2019 Union Budget of India and its expected impact on various sectors of the capital markets. Some of the key points discussed are increased spending on infrastructure like railways and roads, support for affordable housing, push for electric vehicles, consolidation of the banking sector through recapitalization of PSBs and addressing NPAs, and measures to boost tourism and foreign investment. Overall, the budget aims to boost growth through more public investment while maintaining fiscal prudence.

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    Impact of Union Budget On Capital Market

    Uploaded by

    Amit Doshi
    20 views29 pages
    The document provides an overview and analysis of the key aspects of the 2019 Union Budget of India and its expected impact on various sectors of the capital markets. Some of the key points discussed are increased spending on infrastructure like railways and roads, support for affordable housing, push for electric vehicles, consolidation of the banking sector through recapitalization of PSBs and addressing NPAs, and measures to boost tourism and foreign investment. Overall, the budget aims to boost growth through more public investment while maintaining fiscal prudence.

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    Budget Impact on capital markets - July 2019

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    Impact of Union Budget on Capital Market - Copy

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    The document provides an overview and analysis of the key aspects of the 2019 Union Budget of India and its expected impact on various sectors of the capital markets. Some of the key points discussed are increased spending on infrastructure like railways and roads, support for affordable housing, push for electric vehicles, consolidation of the banking sector through recapitalization of PSBs and addressing NPAs, and measures to boost tourism and foreign investment. Overall, the budget aims to boost growth through more public investment while maintaining fiscal prudence.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    20 views29 pages

    Impact of Union Budget On Capital Market

    Uploaded by

    Amit Doshi
    The document provides an overview and analysis of the key aspects of the 2019 Union Budget of India and its expected impact on various sectors of the capital markets. Some of the key points discussed are increased spending on infrastructure like railways and roads, support for affordable housing, push for electric vehicles, consolidation of the banking sector through recapitalization of PSBs and addressing NPAs, and measures to boost tourism and foreign investment. Overall, the budget aims to boost growth through more public investment while maintaining fiscal prudence.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 29

    Impact of Union Budget 2019 on

    Capital Markets

    Presented by
    Amit Doshi
    Investment Director
    Care Portfolio Managers Pvt. Ltd

    July 7, 2019
    Overview
    Union Budget – Key Numbers
    Union Budget – More of an extension..

    New Existing
    Union Budget – Govt. Spending
    Focus on Reducing Urban-Rural Divide

    Electricity

    Clean Cooking
    water gas

    Rural India

    Digital
    SFURTI
    India

    Affordable
    Housing &
    SADAK
    Yojana
    Focus sectors
    Banking and Financial Services
    Modi 1.0
    NPA reduction
    by `1 lakh
    crore

    `2.6 lakh crore


    Record
    already
    recovery of `4
    invested in
    lakh crore
    PSBs

    Domestic
    credit growth
    13.8%
    Banking and Financial Services
    Modi 2.0
    Push to
    leverage
    technology

    Credit
    Offering
    guarantee for
    Doorstep
    purchase of
    Banking
    NBFC assets

    Offering
    `70,000
    online
    crore PSBs
    personal
    recap
    loans
    Banking and Financial Services
    NBFCs
    Banking and Financial Services
    NBFCs

    o RBI will now be regulator for Banks, NBFCs and HFCs

    o Quality of assets to remain under check

    o Steps to allow all NBFCs to directly participate on the TReDS platform

    o Condition of creating DRR done away with

    o For purchase of NBFC assets - `1 lakh crore 6-month credit guarantee for loss of
    upto 10%

    o Interest on bad and doubtful debts to be taxed on receipt basis


    Infrastructure Sector
    Railways & Metros

    2016A 2017A 2018RE 2019RE 2020BE Growth over


    2019RE
    Spend on 0.935 1.099 1.200 1.389 1.602 15.4%
    Railways in ` lakh crore

    Year No of Wagons
    2017 7000
    2018 11790
    2019 9968

    DFC 100,000 wagons


    Infrastructure Sector
    Railways – EPC

    EPC – Contractors – Orderbook ballooned when


    compared to FY19 Revenues

    Order book `6200 cr Order book `28,000 cr


    3.1x FY19 revenues 6.0x FY19 revenues
    Order book `77,500 cr
    at 8.5% management fee
    Infrastructure Sector
    Roadways

    2016A 2017A 2018RE 2019RE 2020BE Growth over


    2019RE
    Spend on 0.737 0.925 1.199 1.405 1.579 12.4%
    Roadways in ` lakh crore

    o Upgrade 1,25,000 kms of road length over the next five years under Pradhan Mantri Gram Sadak
    Yojana (PMGSY)–III with an estimated cost of Rs. 80,250 crs

    o Bharatmala phase 2 to be launched. Coastal road for faster cargo handling for exports
    Infrastructure Sector
    Proxies

    Cement Steel
    Automobile Sector
    Push for EVs
    Below 150 cc
    2-wheelers to
    go electric by
    2022

    Tax SOPs to
    GST on EV
    Lithium-ion
    proposed at
    Battery
    5%
    Manufacturer

    Tax benefit to Phase II of


    EV FAME
    Purchasers Scheme
    Automobile Sector
    Below 150 cc, petrol based two-wheelers to be
    phased out by 2025

    Company % sales that are


    below 150cc
    HEROMOTOCO 95%
    BAJAJ-AUTO 80%
    TVSMOTORS 75%

    Lithium-ion battery manufacturers


    to cash in on this green wave..
    Affordable Housing

    o Additional Interest deduction up to


    `1.5 lakhs for loans up to 31st
    March, 2020 for purchase of house
    valued up to `45 lakh.

    o Overall benefit of around `7 lakh


    over loan period of 15 years
    Affordable Housing

    Construction
    companies Paints
    HFCs

    Pipes
    Conserve and Use water

    o Separate dedicated ministry - Jal Shakti Mantralaya


    o Ensuring piped water Supply to all rural
    o Rain Water Harvesting, Conservation of water, Ground water
    Recharge
    o Waste Water Management; Last 5 years, 5000 crore spent in 254
    projects
    o Of these, 133 are for waste water management
    Getting world to India…Tourism

     Ranked 3rd in generating revenue in


    Tourism sector (WTTC 2018)

     Significant contributor to GDP – Likely


    to grow at 6-7%

     Foreign exchange of USD 28.59 bn


    (2018)

     100% FDI is permissible into Hotel &


    Tourism sector

     Tax holidays for Hotels located around


    UNESCO sites (Except Mumbai & Delhi)
    Tourism

    Accommodation Transportation Attraction Travel


    & Catering Agents
    Foreign Investment

    o Government planning to raise funds in foreign currency


    o Merging of NRI-PIS with FPI regime
    o Ease to enter into India through FPI route
    o Ease of monitoring of investment for NRIs
    o FDI Limits to increase
    o Aviation
    o Media
    o Insurance
    o FDI in single brand retail
    o Relaxation of local sourcing
    o FPIs are permitted to invest in ReITs & InvITs
    o FPIs are permitted to transfer Infra Bonds to DII during lock-in
    o FPIs investment limit applicable at company is now aligned with sector limit
    o Companies can raise funds from FPI till sector limit without special resolution
    Foreign Investment

    Details of Listed ReITs and InvITs

    o ReITS (Mar 2019)


    o Embassy Office Parks (`28,724 Crs)

    o InvITs
    o IndiGrid (`5,012 crs)
    o IRB (`3,789 crs)
    Promotor’s holding from 75% to 65%

    Pros Cons

    Benefit for Addl. Supply


    Minority may impact
    investors market price

    MSCI – Addl MNC may


    FPI opt for
    Investment delisting
    Other announcements

    o PSU Disinvestment of `105,000 crore

    o Rationalisation of STT on Options

    o Increase in Buyback tax inline with DDT

    o 25% corporate tax benefit extended to companies with turnover of


    `400 crore (290 additional companies to be benefit)
    Election and Union Budget are behind us..
    Now what?
    Equity Market in India
    Month Sensex 30 Chg BSE 200 Chg BSE Midcap Chg BSE Smallcap Chg
    Dec-04 6603 887 3019 3432
    Dec-05 9398 42% 1186 34% 4427 47% 5943 73%
    Dec-06 13787 47% 1656 40% 5805 31% 6892 16%
    Dec-07 20287 47% 2657 60% 9789 69% 13348 94%
    Dec-08 9647 -52% 1157 -56% 3235 -67% 3683 -72%
    Dec-09 17465 81% 2180 89% 6718 108% 8358 127%
    Dec-10 20509 17% 2534 16% 7803 16% 9670 16%
    Dec-11 15455 -25% 1851 -27% 5135 -34% 5550 -43%
    Dec-12 19427 26% 2424 31% 7113 39% 7380 33%
    Dec-13 21171 9% 2531 4% 6706 -6% 6551 -11%
    Dec-14 27499 30% 3428 35% 10373 55% 11087 69%
    Dec-15 26118 -5% 3378 -1% 11143 7% 11837 7%
    Dec-16 26626 2% 3511 4% 12031 8% 12046 2%
    Dec-17 34057 28% 4679 33% 17822 48% 19231 60%
    Dec-18 36068 6% 4654 -1% 15438 -13% 14707 -24%
    Jul-19 39908 11% 4989 7% 14933 -3% 14337 -3%
    Disclaimer

    Analysis on companies mentioned in this presentation should not


    be construed as recommendation to ‘buy’ or ‘sell’. We have only
    made an attempt to find impact of the Union Budget 2018-19
    announcements from academic point of view.
    To know more about our portfolio management services kindly visit
    www.carepms.com

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