Share Market Highlights 23 July 2024: Sensex, Nifty settle marginally down in volatile trade on eventful Budget day

Benchmark Sensex and Nifty settled marginally lower in volatile trade on Tuesday as the government proposed to hike securities transaction tax on futures & options in the budget for 2024-25.

Recovering most of its intra-day losses of over 1,200 points, the 30-share BSE Sensex settled lower by 73.04 points or 0.09 per cent 80,429.04.

The index gyrated between highs and lows during the day as Finance Minister Nirmala Sitharaman announced budget proposals for 2024-25.

Hindustan Unilever recorded its consolidated net profit for the quarter ended June 2024 at ₹2,612 crore as against ₹2,566 crore in the corresponding quarter last year

Top gainers:

Titan (6.33%), Tata Consumer Products (4.46%), ITC (4.40%), Adani Ports (3.05%), NTPC (2.30%)

Top losers:

L&T (-3.18%), Hindalco (-2.67%), Shriram Finance (-2.56%), Bajaj Finance (-2.32%), ONGC (-2.06%)

Stocks advanced on BSE at 3 pm on July 23, 2024, were 1,696 against 2,185 stocks that declined; 115 stocks remain unchanged. Total stocks traded were 3,996. The number of stocks that recorded a 52-week high was 164, and those that hit a 52-week low was 34. 

In addition, 243 stocks traded in upper circuit and 290 stocks hit the lower circuit.

Gland Pharma bags tentative approval from the USFDA for Latanoprostene Bunod Ophthalmic Solution.

Stock slides down 0.81% on the NSE, trading at ₹1,978.60

Mahindra & Mahindra Financial Services recorded its consolidated net profit for the quarter ended June 2024 at ₹497.01 crore as against ₹362.22 crore in the corresponding quarter last year.

Stock rises 2.02% on the NSE, trading at ₹298.30

Bata India board has approved closure of Southcan Unit in the state of Karnataka, since a scheme for Voluntary Retirement was implemented in the last financial year. 

Stock is up 1.09% on the NSE, trading at ₹1,556.40

Kajaria Ceramics board has approved to dispose of the machineries of two lines of ceramic tiles of Unit-1 at Gailpur (Rajasthan) plant of the Company.

It has recorded its consolidated net profit for the quarter ended June 2024 at ₹92.32 crore as against ₹109.11 crore in the corresponding quarter last year. 

Stock inches up 0.99% on the NSE, trading at ₹1,403.10

Shares of BHEL and NTPC climbed over 3 per cent on Tuesday after Finance Minister Nirmala Sitharaman said that the state-owned enterprises in the joint venture will set up 800 MW supercritical thermal power plants with higher efficiency.

The stock of both the PSU firms rallied post the announcement.

Shares of BHEL jumped 3.47 per cent to Rs 315.50 apiece while NTPC went up by 3.15 per cent to Rs 385.35 each on the BSE.

Rally in BHEL and NTPC were in sharp contrast with bearish broader market trends.

Shishir Baijal, Chairman and Managing Director, Knight Frank India.

“We welcome the announcements presented today in the Union Budget by the Honourable Finance Minister. The Union Budget for FY 2024-25 has further strengthened the government’s commitment towards long-term social and infrastructure development. The 11.1 lakh crore outlay for capital expenditure, which has risen from 3.3% of GDP in FY 2023-24 to 3.4% in FY 2024-25, will continue to support the agenda for the development of railways, roads, and overall logistics infrastructure in the country. The 12 industrial park projects identified under the National Industrial Corridor Development Program are massive undertakings with the potential to grow economic hubs and boost real estate development along their alignment.

The government continues to promote the creation of affordable housing for the masses by allocating 10 lakh crore under the aegis of the PMAY scheme. Additionally, the initiatives taken to boost rental housing, such as the planned setting up of a regulatory framework and the specific creation of dormitory-style rental housing for industrial workers, mark the beginnings of a much-needed rental housing market in the country. The 1.48 lakh crore outlay dedicated to employment generation should play an important role in boosting incomes for homebuyers in the affordable housing segment.

The specific measures to introduce technological reforms within the regulatory framework for land, such as the digitization of land records and cadastral maps via GIS mapping, will vastly improve transparency in the sector. We also welcome the initiatives taken to boost tourism corridors in states like Bihar and Odisha, in addition to the 15,000 crore allocation toward the development of the capital of Andhra Pradesh, which will boost corollary real estate development.”

“The Budget has emphasized the importance of manufacturing and services. The introduction of the Credit guarantee scheme for MSMEs, enhancement of mudra loans and the introduction of E-commerce hubs under the PPP model will not only boost revenue in these sectors but also fuel employment and provide for higher wage opportunities.”

“The allocation of Rs 1.48 lakh crore for education, employment and skilling is a positive step. Investment in education is the lowest common denominator for solving the majority of India’s long term challenges. Impetus on skilling the youth of our country will be a huge leap towards shaping the future. Also, the loan of Rs 10 lakh for higher education in domestic institutions is a welcome move improving the quality of human capital available for the nation. It augurs well for the Indian economy that we are taking concrete steps for investing in the future of our nation - our children and youth.”

India’s FY25 budget closely aligns with fiscal forecasts, highlighting a prudent yet growth-focused fiscal policy. The budget proposes a 17% increase in public capital expenditure and a modest 6% rise in revenue expenditure. This controlled spending framework is projected to reduce the fiscal deficit to 4.9% of GDP, slightly improving from the interim forecast of 5.1%.

The budget remains committed to strengthening the infrastructure, manufacturing, and housing sectors, which are crucial for long-term economic resilience. Additionally, it introduces targeted measures to boost consumption among low-income groups by focusing on agriculture and welfare schemes and improving access to finance. For the middle-income bracket, the budget encourages consumption through employment incentives and selective income tax reliefs, aiming to stimulate consumer spending and economic vitality.

Despite the overall pro-growth orientation of the budget, the increase in capital gains tax has temporarily impacted equity market sentiments. However, this disturbance is expected to be short-lived, with the broader fiscal strategy fostering a favorable environment for inflation control and sustained financial market positivity in the longer term.

This strategic fiscal plan demonstrates a meticulous balancing act, aiming to maintain fiscal health while stimulating economic growth, showcasing the government’s commitment to managing the complexities of economic stewardship.

“Targeted interventions and making the states a focal point for Infra development is one of the key themes. Increased focus on Cities and their all-round development has taken centerstage. Development of Industrial parks, cities as growth hubs, transit oriented development scheme, brownfield development of cities water and sanitation are some of the key announcements in this regard. The allocation to infrastructure ministries has been maintained as in the interim budget. Expending the allocated budgets will be key for this year.”

Budget summary for us

STT on options goes up from 0.062% to 0.1%. STT on futures goes up from 0.0125% to 0.02% from October 1st. 

We collected about Rs 1500 crores of STT last year, 

@zerodhaonline

. If the volumes don’t drop, this will increase to about Rs 2500 crore at the new rates.

The long-term capital gains tax has been increased from 10% to 12.5%, and the short-term capital gains tax has been increased from 15% to 20%. Both will be applicable from today.

“The latest Union Budget brings promising changes for the jewelry sector, and as Dassani Brothers, we are particularly enthusiastic about the reduction in customs duty on gold and silver to 6%. This pivotal move will make these precious metals more accessible, driving increased demand and allowing us to offer our clients even greater value.

We are committed to pursuing artistic excellence and technical perfection in our creations, and this policy change aligns perfectly with our mission. Lower costs will enhance our ability to provide competitive pricing while continuing to deliver intricate and magnificent adornments that celebrate life’s key moments.

This development not only promises to boost our sales but also reinforces our dedication to building lasting relationships with our clients. We look forward to leveraging these opportunities to strengthen our position as a symbol of luxury and creativity in the jewelry industry.”

Tilak Raj Dua’s, Director General of the Digital Infrastructure Providers Association (DIPA), perspective on how the budget will significantly enhance opportunities within the telecommunications landscape and further empower Digital India.

“The Union Budget 2024-25 demonstrates a clear vision for ‘Viksit Bharat’ with its strong emphasis on infrastructure development and digital transformation. The government’s decision to increase duty on PCBAs for specific telecom equipment by 10-15% reflects a commitment to bolstering ‘Make in India’ in this crucial sector.

We are particularly encouraged by the focus on enhancing Digital Public Infrastructure (DPI), which will undoubtedly play a pivotal role in accelerating India’s economic growth. The prioritization of energy security and infrastructure development aligns perfectly with the telecom sector’s needs for robust and sustainable expansion.

The budget’s provision for skilling 4.1 crore youth is a commendable step that will significantly enhance our nation’s capabilities and prepare our workforce for the digital future. Furthermore, the emphasis on green energy and government initiatives in solar energy will create a robust infrastructure for a greener India, reducing our dependence on other expensive resources. This aligns well with the telecom sector’s growing focus on sustainable practices and energy-efficient technologies.

This budget lays a solid foundation for India’s digital and sustainable future, paving the way for improved connectivity and technological advancement across the nation. As we move forward, the telecom infrastructure industry stands ready to support and contribute to this transformative journey towards a digitally empowered, skilled, and environmentally conscious India.”

India’s FY25 budget closely aligns with fiscal forecasts, highlighting a prudent yet growth-focused fiscal policy. The budget proposes a 17% increase in public capital expenditure and a modest 6% rise in revenue expenditure. This controlled spending framework is projected to reduce the fiscal deficit to 4.9% of GDP, slightly improving from the interim forecast of 5.1%.

The budget remains committed to strengthening the infrastructure, manufacturing, and housing sectors, which are crucial for long-term economic resilience. Additionally, it introduces targeted measures to boost consumption among low-income groups by focusing on agriculture and welfare schemes and improving access to finance. For the middle-income bracket, the budget encourages consumption through employment incentives and selective income tax reliefs, aiming to stimulate consumer spending and economic vitality.

Despite the overall pro-growth orientation of the budget, the increase in capital gains tax has temporarily impacted equity market sentiments. However, this disturbance is expected to be short-lived, with the broader fiscal strategy fostering a favorable environment for inflation control and sustained financial market positivity in the longer term.

This strategic fiscal plan demonstrates a meticulous balancing act, aiming to maintain fiscal health while stimulating economic growth, showcasing the government’s commitment to managing the complexities of economic stewardship.

Budget 2024 is a growth-oriented budget, with a focus on youth employment and skilling. It emphasizes infrastructure development and support for the manufacturing sector, particularly through its focus on MSMEs. For investors, long-term capital gains will attract a tax rate of 12.5%. Additionally, the short-term capital gains tax has been unexpectedly raised from 15% to 20%. Moreover, the government announced an increase in the Securities Transaction Tax (STT) on futures and options. In summary, the budget is tough for investors, good for jobs, and high on political priorities.

“Budget continues its fine balancing act between fiscal consolidation, personal tax rate attractiveness, and more importantly its focus on quality allocation to capital expenditure. Gross borrowing has been marginally reduced to a more comfortable level, which should aid in lowering the cost of borrowing. The bond curve is likely to be guided towards an anchored shorter end, due to delayed and shorter rate cuts, while the longer end is likely to be supported by limited supply pressure and a softer global interest rate cycle”

On the Overall Infrastructure Sector

“The Union Budget’s comprehensive focus on infrastructure development is a transformative step for our nation’s future. The substantial capital expenditure allocation, along with provisions for long-term interest-free loans to states, showcases a visionary approach that will drive economic growth and innovation. Encouraging private sector participation through viability gap funding and market-based financing frameworks will foster a dynamic environment for infrastructure advancements. These initiatives are poised to significantly improve connectivity, boost productivity, and create numerous job opportunities across various sectors. By prioritizing sustainable development and leveraging both public and private investments, this budget positions India on a robust path to becoming a global leader in infrastructure excellence.”

On the MSME Sector

“The Union Budget’s focus on strengthening the MSME sector is a crucial move towards fostering inclusive economic growth. The introduction of the new credit guarantee scheme and the enhanced credit support mechanisms reflect a deep understanding of the needs of small and medium enterprises. By increasing the Mudra loan limits and promoting digital credit assessments, the government is ensuring that MSMEs have the necessary financial support to innovate and expand. These comprehensive measures will not only boost the resilience and productivity of the MSME sector but also generate employment and drive economic development across the nation. We commend the government for its commitment to creating a supportive ecosystem for MSMEs, which are the backbone of our economy.”

On Public Private Partnership

“Finance Minister Nirmala Sitharaman’s emphasis on public-private partnerships is a transformative step for the infrastructure sector. The simplification of FDI norms to facilitate inflows is a genuine effort by the government to attract and sustain private investment in India. By prioritizing and promoting Foreign Direct Investment, the government is creating a conducive environment for investors. By fostering collaboration between the government and private players, we can leverage the strengths of both sectors to enhance project execution, innovation, and efficiency. This approach not only promises accelerated development but also ensures that the infrastructural growth is sustainable and inclusive. The significant budget allocation towards infrastructure underlines the government’s commitment to building a robust foundation for India’s future, and we at Jupiter Wagons Ltd. are enthusiastic about contributing to this national endeavor.”

The 2024 budget presents a mix of expected and surprising measures. While capital expenditure and the fiscal deficit target remain steady, significant changes to tax policies, particularly the increases in LTCG, STCG, and STT, are likely to impact market sentiment. The introduction of new income tax benefits under the new tax regime provides some relief to taxpayers, potentially saving up to ₹17,500. Overall, the budget emphasizes fiscal discipline and targeted support for specific sectors, but its reception by different market segments will vary, with potential underperformance in midcap and smallcap stocks due to valuation concerns. Moving forward, the market’s attention will likely shift to earnings reports and global cues.

We should closely monitor the Nifty’s key support level at 24,150. If Nifty manages to hold above this level despite the budget’s negative implications, it could resume its bullish momentum and target the 25,000 level. Conversely, if Nifty falls below 24,150, it may decline further towards the 23,640 level.

“This Union Budget sets a clear vision for India’s economic future, prioritizing both growth and fiscal responsibility.

The increase in the tax rate on long-term capital gains and short-term capital gains on equity, along with the increase in STT on futures and options, are aimed at moderating currently heightened activity levels and fostering a more sustainable pace of growth in the stock market. We anticipate a small period of adjustment as the market adapts to these new tax measures, but this will ultimately contribute to a sustainable investment landscape with balanced and orderly growth of the capital market.

Overall, this budget instils confidence in India’s growth trajectory and lays a strong foundation for the future. We remain optimistic about the long-term prospects for the Indian economy and capital markets.”

“The Union Budget of 2024 promises holistic growth of India’s macroeconomics at the grassroots level. Investments in job creation, skill upgradation, and MSME development will support more inclusive economic growth. The special focus on agricultural schemes and rural development will indirectly boost consumption spending, particularly in rural and non-metro markets. The budget aligns with the vision of India@100 by allocating resources for rural upliftment, urban development and cultivating a resilient and inclusive economy.”

The fiscal stance of 2024- 25 budget is two fold, to provide positive stimulus to economic growth and secondly to make the domestic economy resilient to global headwinds. The fiscal deficit for the current financial year is projected at 4.9% of GDP compared to 5.1% target in the interim budget. The Gross borrowing and net borrowing is Rs 14.01 and 11.63 Lakh Crores, which is lower by Rs 10,000 Crores only.

The government is reducing the Net T-Bill issuance by Rs 50,000 Crores, due to which the expected reduction of Rs 50,000 Crores due to lower fiscal deficit has not materialised. As per the medium Term Fiscal consolidated road map, the net debt of central government is expected to be 57% of GDP and progressive move lower. The government is targeting a fiscal deficit of 4.5 percent or lower in the next financial year. The government is not giving further roadmap, due to global uncertainty and the government wants to retain the fiscal flexibility to respond to these events.

This is a long term positive as capital expenditure has been retained at Rs 11.11 Lakhs and revenue expenditure has been marginal increased. The revenue receipt is targeted to grow at 10.8 against nominal GDP growth of 10.5, which is conservative. We may have a pleasant surprise, with borrowing lower than what is targeted. The ten year yields may trade in the band of 6.90 to 7 percent in the coming months

“The Union Budget 2024 focuses on growth and stability, with significant allocations for job creation, urban housing, and agriculture. Key changes include a hike in the Standard Deduction to ₹75,000, simplified capital gains taxation, and the abolition of the angel tax. The budget also emphasizes infrastructure, MSMEs, and employment-linked schemes, aiming to stimulate economic growth and investor confidence while providing relief to the middle class. Investors should note the positive impact of these measures on the market, particularly in infrastructure, agriculture, and housing sectors.”

“The government’s commitment to energy security and sustainability is evident in today’s announcements. They are focusing on employment and sustainability with a policy document on energy transition pathways. The auction of offshore mineral blocks will leverage existing exploration efforts, providing essential metals like lithium, crucial for reducing carbon footprints.Introducing green hydrogen into our manufacturing processes will significantly lower our carbon impact. Since hydrogen is part of our raw materials, this change is vital. Coal gasification will enhance self-sustainability and reduce import dependency. We are committed to ensuring that all our practices support a reliable and eco-friendly mining supply chain. These initiatives collectively demonstrate our dedication to a sustainable and resilient future for India.”.

Steel Strips Wheels Ltd recorded its consolidated net profit for the quarter ended June 2024 at ₹40.80 crore as against ₹47.41 crore in the corresponding quarter last year. 

SSWL stock slides down by 0.85% on the NSE, trading at ₹232.68.

On increase in rate if STT, Sandeep Chilana, Managing Partner CCLaw said “ with a view it widen and deepen the tax base the budget proposes to increase the rates of STT on sale of options and futures to 0.1 and .02 % respectively form existing 0.0625 and 0.0125%. This would have a significant impact on the F&O Traders and their margins

Shares of gold and jewellery retailers surged on Tuesday after Finance Minister Nirmala Sitharaman said the Government will reduce the basic customs duty on the yellow metal and silver to 6 per cent.

On the BSE, the stock of Senco Gold zoomed 8.18 per cent to trade at ₹1,018.60 apiece, Rajesh Exports surged 3.65 per cent to ₹308.50 and PC Jeweller jumped 5 per cent to hit the upper band at ₹74.16.

In addition, shares of Titan Company rallied 6.01 per cent to ₹3,450 , Tribhovandas Bhimhji Zaveri rose 9.49 per cent to 149.40 , and Kalyan Jewellers India gained 1.81 per cent to ₹538.90.

Manufacturing and Services - MSME - 

Deepthi Alexander, Partner, Indirect Tax, BDO India

“The Budget has emphasized on the importance of manufacturing and services. The introduction of the Credit guarantee scheme for MSMEs, enhancement of mudra loans and the introduction of E-commerce hubs under the PPP model will not only boost revenue in these sectors but also fuel employment and provide for higher wage opportunities.”

Variable Capital Company (VCC) - 

Nitesh Mehta, Partner, M&A Tax and Regulatory Services, BDO India

“The introduction of Variable Capital Company (VCC) structure for Private Equity could be a game changer for the Fund community. This structure is prevalent in countries like Singapore and the introduction of VCC coupled with the existing GIFT city structure could certainly bring India a step closer to becoming a financial hub like Singapore.“

Variable Capital Company (VCC) - 

Manoj Purohit, Partner & Leader, Financial Services Tax, Tax & Regulatory Services, BDO India

“The announcement for rolling out the Variable Capital Company (VCC) regulations primarily will aid in assisting the aircraft and shipping companies in their leasing activities. This will bring India in line with countries like Singapore and Mauritius. This will also incentivise entities to carry out business in India by taking advantage of the flexibility of the VCC model.”

12 new Industrial Parks

Manoj Purohit, Partner & Leader, Financial Services Tax, Tax & Regulatory Services, BDO India

“The announcement for the set-up of 12 new Industrial Parks will boost the manufacturing sector and encourage new entrants to get easy entry into the space with much-needed financial support. It will also enhance employment opportunities and enable the Banking sector to participate while financing the working capital needs.

Announcement on IBC - 

Samir Sheth, Partner & Head, Deal Advisory Services, BDO India

“One of the hindrances to the success of IBC was the delays from the judiciary system. Setting up additional tribunals to deal with IBC cases is a welcome step which will expedite the resolution process. While the details are yet to be released, an integrated technology platform will also help in the timely dissemination of information and bring in efficiencies in the IBC process”

Variable Capital Company (VCC) - 

Manoj Purohit, Partner & Leader, Financial Services Tax, Tax & Regulatory Services, BDO India

“The announcement for rolling out the Variable Capital Company (VCC) regulations primarily will aid in assisting the aircraft and shipping companies in their leasing activities. This will bring India in line with countries like Singapore and Mauritius. This will also incentivise entities to carry out business in India by taking advantage of the flexibility of the VCC model.”

12 new Industrial Parks

Manoj Purohit, Partner & Leader, Financial Services Tax, Tax & Regulatory Services, BDO India

“The announcement for the set-up of 12 new Industrial Parks will boost the manufacturing sector and encourage new entrants to get easy entry into the space with much-needed financial support. It will also enhance employment opportunities and enable the Banking sector to participate while financing the working capital needs.

Stamp Duty

Manoj Purohit, Partner & Leader, Financial Services Tax, Tax & Regulatory Services, BDO India

“The rationalisation of differential stamp duty levied across the states would ensure a level playing field and make the cost of investments in immovable property lucrative. Also, concessional rates for women investors would encourage investment by women and make them financially independent.”

Government has focused on boosting consumption by supporting rural economy/MSME and broader skilling and employment generation. Capital expenditure though remain unchanged will also drive growth in economy. Tinkering on capital gain taxation is a key negative.

On efforts to reduce tax litigation, Sandeep Chilana Managing Partner, CCLaw said “while step to increase monetary limit for filing appeals under direct and indirect taxes to 60 lakhs, 2 crore and 5 crore for tribunals, high court and Supreme Court is welcome step. The similar relief should also be considered for GST. It is also important that that the government takes serious steps to ensure that departmental officers follow the judgments of tribunals and high court and do not confirm demands contrary to principles of judicial discipline”

On increase in capital gains on financial assets, Sandeep Chilana Managing Partner, CCLaw says “The FM has proposed increase in rate of tax on both short term and long term gains from certain financial assets. In past few years substantial investments have been made by the retail investors in financial markets. Change in rates of tax will likely have significant impact on the sentiments of retail investors with respect to consistency in tax policy and doubt that even higher taxes may be imposed in future.

“Availability of GST data, account aggregators have enabled financiers to lend proactively to MSMEs. Bank credit to Industrial MSMEs has grown by over 13% CAGR in the last two years. Additionally, there has been a significant improvement in overall delinquencies from over 12% in FY17 to 2.3% in Q2FY24. MSMEs have an estimated credit gap of approximately Rs 28 lakh crore. Banks account for a significant share of MSME lending. Hence the introduction of schemes such as credit guarantee schemes for MSMEs in manufacturing, enhancement in the limit of MUDRA loans to Rs 20 lakh, reducing the turnover criteria for buyers on the TReDs platform would enable MSMEs access funds for capital expenditure / working capital. Further plans to introduce a scheme for enabling stressed MSMEs access bank finance and enabling public sector banks in creating in-house, technology-driven underwriting skills utilising MSMEs digital footprint and bring them in the formal credit system is a positive step.”

“In the Budget, the Finance Minister announced a reduction on Basic Custom Duty on gold and silver from 10 percent to 6 percent. Adding 5 percent AIDC, which remains unchanged, the total import duty on gold and silver is reduced from 15 percent to 11 percent now. As a result, the price of gold reacted lower in MCX by more than ₹2000 to ₹70,350, and silver by ₹2500 to ₹86,600 as the market prices in the lower import duty gap of 4%. The broad view remains volatile and weak as Comex gold stays below $2415.”

“The recent changes in the union budget, particularly the increase in STCG and LTCG tax signal a significant shift. While the market’s initial reaction may seem bearish, we believe these changes will ultimately foster a more stable and mature investment environment.

The widening gap between STCG and LTCG rates is a clear incentive for longer-term holdings, which aligns with our view of creating sustainable wealth. This move is also a step towards standardising taxation across various asset classes, potentially simplifying the investment decision-making process for many.

The market is currently responding with a short-term perspective, particularly concerning the Securities Transaction Tax (STT) adjustments in derivatives. This will undoubtedly impact the profitability of frequent traders. However, we encourage investors to look beyond immediate market reactions and consider the long-term benefits of a tax structure that promotes patient capital.”

“The government’s announcement to build 3 crore additional houses is a major boon for both housing finance companies and cement companies. Housing finance firms stand to benefit from a surge in loan demand as more people seek to own homes. This increased business could lead to expansion and new market opportunities, particularly in rural areas. However, they must also navigate challenges in credit assessment and risk management, especially in the affordable housing segment. Cement companies will experience a surge in demand for their product, driving sales and potentially allowing for price increases. To meet the heightened demand, they may need to invest in expanding production capacity, while also managing rising raw material costs.”

“The Union Budget has maintained the capital expenditure at Rs.11.11 lakh crore, in line with the allocations of the Interim Budget. The provision of interest-free loans amounting to Rs.1.5 lakh crore to states represents a strategic initiative to enhance their capital expenditure. According to CareEdge Ratings, there is an anticipated rise in the participation of the public-private partnership model within the infrastructure ventures. The unveiling of projects such as industrial parks, industrial corridors, and connectivity enhancements across several states is poised to elevate the cost-effectiveness of locally manufactured goods and augment the logistics efficiency. “

“The recent changes in the union budget, particularly the increase in STCG and LTCG tax signal a significant shift. While the market’s initial reaction may seem bearish, we believe these changes will ultimately foster a more stable and mature investment environment.

The widening gap between STCG and LTCG rates is a clear incentive for longer-term holdings, which aligns with our view of creating sustainable wealth. This move is also a step towards standardising taxation across various asset classes, potentially simplifying the investment decision-making process for many.

The market is currently responding with a short-term perspective, particularly concerning the Securities Transaction Tax (STT) adjustments in derivatives. This will undoubtedly impact the profitability of frequent traders. However, we encourage investors to look beyond immediate market reactions and consider the long-term benefits of a tax structure that promotes patient capital.”

PART A

➡️ 5 schemes to be announced, centred on youth, employment and skilling benefiting 4.1cr youth. This will entail an outlay of INR2lk cr.

➡️ Proposal to allocate ₹ 1.48 lakh crore for education, employment and skilling

➡️ Focus on strengthening production, storage and marketing for oil seeds such as mustard, groundnut, soy, etc. Vegetable clusters to be developed.

➡️ Provision of INR 1.52lk cr announced for agri and allied activities.

➡️ Will give employment-linked incentives. Enrolment in EPFO. Recognition of first-time employees. 

a) First-timers will receive a one-month wage from the government in three instalments, as registered in EPFO, up to INR 15,000. Eligibility is for less than ₹1 lakh per month.

b) Govt will reimburse up to ₹3,000 per month per employee for their EPFO contributions for up to ₹1lk per month salary. It should help 50 lakh jobs.

➡️ Proposal to allocate INR 26,000cr for the development of highways in Bihar. New airports, medical colleges, and sports infra will be constructed in Bihar. 

➡️ Financial Assistance worth INR 15,000cr for Andhra Pradesh through multilateral agencies.

➡️ 3cr additional houses under PMAY have been announced

➡️ More than 100 branches of post-payment banks have been budgeted to open in North Eastern region

➡️ Credit guarantee schemes for the purchase of machinery without collateral. Guarantee of ₹100 cr.

➡️ New assessment model: PSU will build their own internal credit assessment model as per digital imprint. 

➡️ Credit support to MSME during stress period (SMA account) guarantee. MUDRA loans increased from 10 lakh to 20 lakh.

➡️ TReDS: Reduce the turnover threshold from INR 500cr to INR 250cr for buyers. Will bring more CPSE on to the platform.

➡️ SIDBI will open new branches to serve more MSMEs. Opening of 24 new branches this year.

➡️ Proposal to allocate INR 2.66lk cr for rural development, which is a 40% increase YoY.

➡️ Proposal to allocate INR 3lk cr towards the benefit of women and girls

➡️ PMAY Urban - investment of INR 10lk cr (2.2lk cr central assistance in next 5 years). The provision of interest subsidy is envisaged.

➡️ Stamp duty moderation by states encouraged. Further benefits are recommended for properties purchased by women.

➡️ R&D for Small modular nuclear reactor: Partner with pvt sector firm; R&D Bharat small modular reactor; R&D funding announced will be available for this sector

➡️ Critical minerals to be set up for the recycling of critical minerals and their overseas acquisitions. The government will launch the auction of the first tranche of Offshore blocks for mining, building on the exploration already carried out.

➡️ Water supply and sanitation: The Center will support states along with multi-lateral agencies for 1) water supply projects, 2) sewage treatment, 3) solid waste management, 4) such services for the top 100 cities, and 5) use of treated water for irrigation and tank filling. Positive for Water supply & treatment companies (Va Tech Wabag, EMS ltd, Ion Exchange) and solid waste management companies (Antony waste).

➡️ Infra investment: ₹11,11,111 crore 2.4% of GDP announced (same as in interim budget)

➡️ PM Suryaghar Muft Bijli Yojana - free electricity up to 300 units/month

➡️ PM Gram Sadak Yojana: Phase 4 will be launched.

➡️ Assistance for flood management program in Assam, Himachal Pradesh, Uttarakhand and Sikkim announced. ₹11,500cr was announced for the flood mitigation program in Bihar.

➡️ Spiritual tourism - Vishwpat Temple corridor and Mahabodhi corridor to transform into tourist destinations. Focus on the development program for Rajgir and Nalanda.

➡️ Anusandhan national research: To spur private sector R&D with a financing pool of INR 1lk cr

➡️ Space economy: facilitate setting up of VC fund worth ₹1,000cr

➡️ Digitization of rural land records, mapping of rural pedestrian pathways in focus

➡️ NPS Vatsalya: investment by parents and guardians for minors which can be converted to NPS accounts seamlessly after attaining majority

➡️ Budget for 2025: Total receipts: ₹32.07 lk cr, Total expenditure: INR 48.21lk cr

➡️ Gross/net borrowing target: ₹14.01lk cr/₹11.06lk cr

➡️ Projected Fiscal Deficit: 4.9%. FY26 Fiscal Deficit: 4.5%

PART B

➡️ Reduce BCD on mobile phones, PCB charges to 15%

➡️ Seafood exports touched ₹60,000cr in FY24. Frozen shrimp was 2/3rd of this. To reduce BCD on fish feed and shrimp to 5%.

➡️ Reduce custom duty gold & silver to 6%

➡️ Propose to increase BCD on ammonium nitrate from 7.5% to 10%

➡️ Solar Energy: To promote the domestic manufacturing supply chain, govt decides NOT to extend duty exemption on capital machinery used for solar cells/modules, gases & glass manufacturing. Negative for solar cell/module manufacturer

➡️ To promote domestic aviation and ship repairs and maintenance, will extend the export time period for imported repair goods to 1 year from 6 months

➡️ TDS rate on e-commerce operators to be reduced from 1% to 0.1%

➡️ Proposal to de-criminalize TDS defaults

➡️ LTCG on financial and non-financial assets increased from 10% to 12.5%. STCG on certain financial assets to be increased to 20%. Exemption on LTCG on certain assets increased to ₹1.25lk.

➡️ Abolish angel tax to support start-ups. Proposal for a simpler tax regime fo foreign shipping companies operating cruises in India

➡️ Safe harbour rates for foreign mining companies selling diamonds in India

➡️ Reduce corporate tax rates on foreign companies to 35% from 40%

➡️ STT on F&O to be increased to 0.02% from 0.01%

➡️ Income on buyback to be taxed in the hands of the recipient

➡️ Standard deduction to be increased from INR 50,000 to INR 75,000 under the new tax regime

➡️ Revised tax slab under new regime: ₹0-3lk - NIL; ₹3-7lk - 5%; ₹7-10lk - 10%; ₹10-12lk - 15%; ₹12-15lk - 20%; ₹15lk+ - 30%

On standard deduction limit in new tax regime, Jidesh Kumar, Managing Partner, King Stubb & Kasiva, Advocates and Attorneys, says - “my view is that, I appreciate the budget benefits for the working class, women, entrepreneurs and MSMEs. These measures provide crucial relief and show a strong commitment to supporting hardworking individuals.”

Here is the view of Mr. Rishi Agrawal, CEO and Co-Founder of Teamlease Regtech.

I am thrilled to see that the finance minister has put the spotlight on the expedited closure of LLPs. This measure will aid in reducing the duration of closure for non-viable limited liability companies. She has also addressed the issue of reforming and enhancing the Insolvency Business Center (IBC) in order to expedite the resolution of insolvencies. These steps will help ease the ease of doing business by helping improve the efficiency of corporate exits, which has been an issue in the country. In the past, we have seen greater emphasis on single window clearance for faster setup. The ease of corporate exits has not received sufficient attention. This represents a significant advancement in the right direction. It will assist investors in exiting an unviable venture in a timely manner. FM has announced the launch of Jan Vishwas 2.0. Deeply entrenched hostility in India’s employer compliance must be placed in the museum where it belongs. Population scale DPI, particularly in corporate governance, is a step in the right direction towards improving ease of compliance via digitization.

Global Health Ltd has been offered by Mumbai Housing and Area Development Authority (MHADA) a land parcel measuring 8859.24 sq. meters for an amount of ₹125.11 crore (approx.) on lease basis under online e-tenders issued by MHADA.

Global Health stock declines 1.11% on the NSE, trading at ₹1,178.

“Customs duty on gold and silver has been reduced to 6% that may lead to a decline in domestic prices and perhaps lift demand. The existing duty on gold and silver is 15 percent which comprises 10% of basic custom duty and 5 percent as Agricultural Infrastructure Development cess.”

“The triad of welfare spends, capital expenditure and fiscal discipline has been beautifully balanced by the Government in this budget. There is a good amount of welfare spend on women led development, the MSME sector and the agriculture sector covering a large part of the populace. Augmenting the welfare spends with an adequate thrust on capital expenditure while containing the fiscal deficit at 4.9% of GDP is a fine balancing act. However, the increase in capital gains tax and securities transaction tax is a dampener for capital markets!”

Delphin Varghese - Co-founder and Chief Revenue Officer, AdCounty Media

The seriousness of the government in facilitating credit access to aggrieved MSMEs stands as a critical factor for survival and growth of the sector. While MSMEs are the backbone of the economy—contributing 30 per cent to GDP and 48 per cent to exports—it faces an estimated credit gap of ₹20-25 trillion by IFC estimates. There could be a gap bridged with the proposed multiple mechanisms; for example, credit growth to MSMEs was 11% year over year in FY2021. Better access to credit would have implications for massive job creation and economic stability if taken from over 110 million working in the MSME sector. This is opportune; 67% of MSMEs surveyed said that the pandemic hit them adversely. By ensuring credit flow, it would revive a sector that is important for achieving India’s goal of a $5 trillion economy.

Input by Atif Shamsi, CEO & Founder at OuchCart

It is an integral part of ease of doing business reforms, and subnational deregulation aimed at reducing the compliance burden of MSMEs. As of now, compliances run to over 750 annually for MSMEs, with an estimated ₹12 lakh crore cost incurred for the same. The maze of these regulations has reportedly retarded their growth—it is stated that about 64% of MSMEs reported compliance as a huge challenge. Streamlined, these two processes can help save billions in compliance costs and hundreds of work hours annually. This is also in step with India’s vision to break into the top 50 in the World Bank Ease of Doing Business rankings from its current position of 63rd. Coupled with simplification of regulations at the state level, it has the potential to unlock the actual potential of the MSME sector accounting for 95 percent of India’s industrial units. Coupled with access to credit, this could be transformative for the 63.4 million MSMEs in India.

Input by Ridhima Kansal, director of Rosemoore

It is of significant interest that the Economic Survey puts a focus on striking a fine balance between concerns over trade and security with China for MSME growth. Indeed, the Chinese share in India’s imports is about 30%, a large share of which comprises intermediate goods that are vital for MSMEs. Recent tensions along the border led to restrictions that affected 19% of India’s imports from China. This is what most affected the MSME sector, with 45% of them reporting some form of supply chain disruption. This call for balance underlines a complex interdependence, wherein the 70% of active Pharma Ingredients come from China and 80% of cells utilized in the solar sector are also manufactured there. The government is balancing this call for shielding MSMEs from dumping or unfair competition against access to vital inputs. This is a sensitive balancing act for 6.3 crore MSMEs in India, as it affects their competitiveness and survival not only in the domestic market but also in international markets.

“Finance Minister Nirmala Sitharaman’s focus on energy security is crucial for addressing India’s growing energy demands and meeting NDC targets. The Economic Survey 2023-24 emphasises the need for a diversified energy mix to ensure sustainable growth. With energy needs projected to grow 2-2.5 times by 2047, addressing renewable energy challenges is imperative. The new 2400 megawatt power plant and the PM Suryaghar Muft Bijli Yojana, providing free solar electricity to 1 crore households, are significant steps. These initiatives will boost our energy infrastructure and encourage renewable energy adoption.

These measures will certainly contribute to India’s sustainable and secure energy future.”

IBC:

While speedy resolution is the main pillar for IBC, time constraints in implementation has been one of the main drawbacks. Building an infrastructure to overcome this hassle, which should ideally include AI, could go a long way in making IBC a true success. This Budget raises hope in this regard.

Banking:

Reforms in the opportunities for FPIs, especially in the debt space, could go a long way in strengthening the corporate bond as well as private credit market in India. As FPIs play a crucial role in this space, even minor changes in the debt / distressed debt space can have a huge impact.

Karthik Srinivasan, Chief Business Officer, at HDB Financial Services, an HDFC Bank subsidiary with an AUM of over Rs. 95,000 crores.

“Today’s budget announcement heralds a transformative era for Bharat, particularly for our vibrant MSME sector. By facilitating the working capital needs, setting up food irradiation units and quality testing labs, and establishing e-commerce export hubs, the government is laying a robust foundation for MSMEs to thrive. These measures will empower small and medium enterprises to grow, compete globally, and drive economic growth.

The introduction of a comprehensive credit guarantee scheme, coupled with significant provisions for long-term interest-free loans to states, underscores a commitment to fostering an aspirational India. This holistic approach will not only enhance the financial stability of MSMEs but also stimulate innovation, create jobs, and boost exports. Encouraging states to provide similar support for infrastructure will further amplify these benefits, ensuring balanced regional development.

These initiatives will open new opportunities for MSMEs, propelling Bharat towards a more inclusive and prosperous future.”

Indian equities fell sharply as government revised capital gain tax on financial assets. 

Nifty Spot: 2422413092, Down 379 points/-1.57% 

Nifty Bank Spot: 51600, Down 686 points/-1.30%

The comprehensive scheme to provide internship opportunities to one crore youth in the top 500 companies over the next five fiscals will support upskilling of youth by providing them with practical work experienced for 12 months.

Companies will have to bear the training cost and 10% of the internship costs are to be used from CSR funds, thereby encouraging the creation of job opportunities. This initiative will increase skilled workforce according to industry needs. - CRISIL

Encouraging new employment generation while lending a fiscal hand of support

The proposal to reimburse employers upto INR 3000 per month for 2 years for employee’s provident fund contributions is an interesting change with the government lending a hand and nudging employers towards new employment generation.

Additionally, the new scheme will provide a month’s wage and contribute to provident fund, applicable to new workforce in formal sectors, thereby encouraging new hires.

Other applicable conditions for the benefits remain to be seen, but definitely a step in the right direction to address a key issue of employment.

This is certainly an interesting move – need to examine the details. One of the ills plaguing IBC is the time blocked in litigations on procedural matters. If an integrated tech platform can offer consistent solutions for clearing this bottle- neck, that in itself can significantly propel the IBC systems. Technology can also help courts expedite their decisions on substantive issues. Further, any efficiencies in reduction of process -costs and uncertainties (like delayed claim filings by tax authorities) through technological innovations, will also directly improve lender recoveries. Together with these, streamlining the prioritisation of commercial claims by government/ its instrumentalities/ departments, would also help resolve a significant number of pending matters.

The government has utilised extra revenues to speed up fiscal consolidation. With the fiscal deficit revised down 20 basis points from the interim budget to 4.9% for this fiscal, it will help ease government security yields and create room for corporate borrowings. We expect sovereign yields to settle at 6.8% by the end of this fiscal - CRISIL

Increase in STT rate on Future and Options is in line with the concerns expressed in the Economic survey and by the markets regulator regarding increase in speculation,Sunil Gidwani, Partner, Nangia Andersen

Holding period and rationalisation of short term and long term capital gains rates on financial and non-financial assets would help result in much needed simplification in tax payments and compliance. Sunil Gidwani, Partner, Nangia Andersen LLP.

Better revenue collections are being used to maintain the capex thrust and raise revenue expenditure partly, while the rest is being used to trim the fiscal deficit. Clearly, the tax net is being spread wider - CRISIL

Personal vehicle sales, especially two-wheelers, will benefit from the plan to enhance banking sector reach in the north-east and overall development of the eastern and north-eastern states, because it will improve the flow of retail credit in those geographies — CRISIL

The budget introduces personal income tax relief for four crore salaried and pensioners under the new tax regime, with the standard deduction increased to Rs 75,000 from Rs 50,000. The deduction on family pension for pensioners will be enhanced to Rs 25,000. The revised tax rate structure includes 0% for income up to Rs 3 lakh, 5% for Rs 3-7 lakh, 10% for Rs 7-10 lakh, and 30% for income above Rs 15 lakh. Salaried employees in the new regime can save up to Rs 17,500. Due to the new tax slabs, the government will forgo Rs 7,000 crore in revenue. Long-term gains on financial and non-financial assets will attract a tax rate of 12.5%. The government proposes the Vivad Se Vishwas Scheme 2024 to reduce tax litigation and abolish the angel tax for all classes of investors in startups. The capital gains exemption limit on certain financial assets is proposed to be raised to Rs 1.25 lakh per year for the middle and upper middle class. The Securities Transaction Tax (STT) on F&O of securities is hiked to 0.02% and 0.1%, and income received from share buybacks will be taxed in the hands of the recipients.

The plan to develop energy transition pathways, and the setting of energy emission-based targets for hard-to-abate sectors will drive investments in sustainable technologies and lay the framework for the development of the carbon market. This is a seminal step towards de-carbonisation. - CRISIL

Shilpa Biologicals Pvt Ltd (SBPL), a wholly owned subsidiary of Shilpa Medicare, has received registration approval for Adalimumab from Morocco, MoH . This is the first Biosimilar approval from any international market for high concentration Adalimumab developed by SBPL. 

Shilpa Medicare stock is up 2.95% on the NSE, trading at ₹663.

Reiteration of reduction in fiscal deficit to below 4.5% of GDP in FY2026, in line with ICRA’s expectations; new medium term fiscal consolidation path linked to reduction in debt/GDP ratio instead of a clear reduction in fiscal deficit/GDP ratio — ICRA

Divyam Mour, Research Analyst , Samco Securities

The Finance Minister’s allocation of ₹10 lakh crore to help 1 crore poor middle-class family buy houses will boost the demand for residential properties. This funding, along with interest subsidies, will greatly benefit real estate developers like DLF, Macrotech Developers, NBCC, and Sunteck Realty, as well as housing finance companies focused on the lower and middle classes, such as Aadhar Housing Finance, Aptus Value Housing Finance, and Aavas Financiers.

The financing for shrimp farming through NABARD will help India move towards its seafood exports target of Rs 1 lakh crore over the next 2 fiscals from Rs 60,500 crore last fiscal. Shrimps account for 70% of seafood exports and their financing should benefit post-harvest infrastructure and quality check measures, thereby boosting aquaculture. —. CRISIL

The delay in resolution of cases under the Insolvency and Bankruptcy Code is a major concern and impacts recovery by lenders. Therefore, any step, such as the setting up of an online platform to reduce resolution timelines, is welcome.

Currently, resolution processes are taking an average 679 days against half that stipulated, or 330 days. There is also a direct correlation between the time taken for resolution and the recovery rate. 

Resolution days Recovery rate

0 -330 49.22%

330 - 599 35.98%

600 or more 26.11% - CRISIL

Strategy and vision paper for financial service sector would hopefully review the working of financial institutions holistically and suggest strengthening measures to make them more effective in capital mobilisation - 

Sunil Gidwani, Partner, Nangia Andersen LLP.

Anurag Singh, Managing Director at Primus Partners.

“Tapping Nuclear energy with new technology reactors will diversify our electricity sources and reduce GHG emissions. It may also help in Hydrogen economy”

Amit Goel, Co-Founder & Chief Global Strategist, Pace 360

Finance Minister Nirmala Sitharaman stated that agricultural research will be transformed to focus on raising productivity and developing climate-resilient varieties. The research will be overseen by domain specialists to ensure its efficacy and relevance. The government has approved Rs. 1.52 lakh crore for agricultural and allied sectors. Additionally, this could boost rural demand for automobiles, particularly entry-level two-wheelers and tractors.

Bond market rallied, with yield of the 10- year benchmark G-Sec currently trading at 6.93 per cent against previous close of 6.98 per cent on Union finance minister’s commitment to fiscal consolidation in the Union Budget

Currently Variable Capital Company structure is possible for fund structures. Extension of VCC to aircraft and ship leasing companies in GIFT would provide operational flexibility to leasing companies - 

Sunil Gidwani, Partner, Nangia Andersen LLP.

The doubling of MUDRA loans to Rs 20 lakh for entrepreneurs that availed of, and repaid, loans under the Tarun Scheme is significant. The scheme accounts for a quarter of all MUDRA loans. 

Overall, MUDRA loans account for 10-15% of the total MSME credit in India. - CRISIL

Top gainers on the NSE as at 12.04 pm:

Tata Consumer Products (2.48%), Hero Motocorp (2.35%), Hindustan Unilever (2.15%), ITC (2%), NTPC (1.63%)

Top losers:

Hindaloc (-2.74%), ONGC (-2.73%), Shriram Finance (-2.71%), L&T (-2.58%), SBI Life (-1.47%)

T Manish, Research Analyst, SAMCO Securities

Finance Minister Nirmala Sitharaman announced about extending finance to Shrimp production and marketing for overall development of the industry. Direct beneficiaries being Waterbase, Avanti Feeds, Apex Frozen Foods.

Sidhhesh Mehta, Research Analyst

The Skilling Program will train 20 lakh youth over five years through industry-designed courses, enhancing employability and addressing skill gaps. These initiatives will reduce unemployment, increase disposable income, and stimulate economic growth, promoting a more inclusive and skilled workforce. This is a positive for NIIT Ltd and Aptech.

T Manish, Research Analyst, SAMCO Securities

Finance Minister Nirmala Sitharaman announced Research based setups for raising productivity & Developing climate resistant crops. Providing new 109 climate resistant crops in 32 categories to be developed and released. Companies like Kaveri Seeds, Dhanuka Agritech would be the beneficiaries.

In addition to the interim budgets’ announcements about the Atmanirbhar Oilseeds Abhiyaan a strategy to be formulated to achieve atmanirbharta for oilseeds such as mustard, sesame, sunflower, groundnut and soybean.

Moin Ladha, Partner, Khaitan & Co-

Currently, Indian limited liability partnerships (LLPs) can opt for closure by way of (i) striking off under the Limited Liability Partnership Act, 2008 (LLP Act); or voluntary winding up by the NCLT under the LLP (Winding up and Dissolution Rules) 2012; or voluntary liquidation under Insolvency & Bankruptcy Code 2016. The Government has announced measures to reduce timelines for such voluntary closures. This will allow for ease of doing business in India and will promote LLP as a form of setting up a commercial presence.

Kumar Saurabh Singh, Partner at Khaitan & Co basis the budget announcement -

To improve outcomes under the Insolvency and Bankruptcy Code (IBC), the Finance Minister announced the establishment of an integrated tech platform. This is a welcome announcement from the FM, which will be critical for expediting the resolution of pending cases under IBC in keeping with the key objective of IBC being time bound resolution of assets for value maximisation.

Stocks advanced on BSE at 12.04 pm on July 23, 2024, were 1,736 against 1,958 stocks that declined; 153 stocks remain unchanged. Total stocks traded were 3,847. The number of stocks that recorded a 52-week high was 135, and those that hit a 52-week low was 21. 

In addition, 209 stocks traded in upper circuit and 218 stocks hit the lower circuit.

The capex for infrastructure sectors is along the lines of the announcement in the interim budget. Over the past three years, the number is higher in absolute terms but lower as a percentage of allocation. - CRISIL

Capex in the first two months of this fiscal was down 14.4% on-year. So, the government’s budgeted target of Rs 11.1 lakh crore means capex will have to grow at a 23.9% clip for the rest of this fiscal. — CRISIL

Apurva Sheth, Head of Market Perspectives & Research Samco Securities

Focus on developing tourism in Bihar & Odisha to benefit PSU companies related to tourism like Balmer Lawrie, ITDC, TFCI Ltd.

InfoBeans Technologies recorded its standalone net profit for the quarter ended June 2024 at ₹11.42 crore as against ₹4.64 crore in the corresponding quarter last year/.

Stock rises 2.82% on the NSE, trading at ₹461.90.

T Manish, Research Analyst, SAMCO Securities

Finance Minister Nirmala Sitharaman announced about extending finance to Shrimp production and marketing for overall development of the industry. Direct beneficiaries being Waterbase, Avanti Feeds, Apex Frozen Foods.

Rural demand for two-wheelers and tractors should get a leg-up from the allocation of Rs 1.52 lakh crore for agriculture and allied activities. Additionally, demand for tippers and construction equipment will be spurred because of infrastructure development projects in Bihar and Andhra Pradesh. — CRISIL

Sameer Jain, Managing Director at Primus Partners.

“MSMEs consume approximately 50% of nation’s power needs and generate over 75% of GHG emissions. While the budget has committed support to MSMEs to grow and compete globally, additional support is required for the greening of the MSME sector, including easier access to climate financing.

It will be interesting to see the details of the provisions for uses of Credit Guarantee Schemes esp. for Green projects.”

Divyam Mour, Research Analyst , Samco Securities

The Finance Minister’s allocation of ₹26,000 crore for highway development in Bihar, including the construction of a two-lane bridge over the Ganga and the development of highways like the Patna-Purnea Expressway and Buxar-Bhagalpur Expressway, will greatly benefit highway construction companies such as GR Infraprojects, KNR Construction, and PNC Infratech. This development will also boost cement demand, benefiting producers like Ultratech, Adani Cement, India Cement, and JK Cement.

India imports ~60% of its edible oil requirement, so the support announced to self-sufficiency in oilseeds production is welcome. Between 2015 and 2023, nine annual oilseed crops have seen a compound annual growth rate of just 7.3%. - CRISIL

Adarsh Somani, Partner, Economic Laws Practice

The Union Budget reflects a continued prioritization of the agricultural sector, with an increased allocation of ₹1.52 lakh crore this year, up from ₹1.25 lakh crore last year. This substantial investment is expected to stimulate rural demand, particularly benefiting the automotive industry with increased sales of two-wheelers and tractors.

✅ Investment-ready “plug and play” industrial parks to be developed in or near 100 cities

✅ 12 industrial parks sanctioned under National Industrial Corridor Development Programme

Focus on municipal projects and brownfield development of the cities to support urban local bodies’s capex and improved service delivery — ICRA

“MSMEs consume approximately 50% of nation’s power needs and generate over 75% of GHG emissions. While the budget has committed support to MSMEs to grow and compete globally, additional support is required for the greening of the MSME sector, including easier access to climate financing.

It will be interesting to see the details of the provisions for uses of Credit Guarantee Schemes esp. for Green projects.”

“The outlay provided for employment and skilling will help our youth from two perspectives - education and skilling loans will bring more students to the education fold thereby increasing the gross enrolment ratio (a move towards achieving 50% target by 2035). Second, it will help prepare our youth with skills relevant for industry needs, thereby adding to the productive workforce needs of today and tomorrow.”

Shakti Pumps (4.97%)

Jain Irrigation Systems (3.59%)

Mahindra EPC Irrigation (1.75%)

Latteys Industries (1.97%)

Focus on e-commerce hubs will help the D2C ecosystem including small vendors and aggregators to bring in greater efficiency in their operations and improve accessibility to markets including exports.

Budgetary announcements 

Government to present India as global tourism hub. 

(Supportive for sector stocks. Top picks: ITDC, TFCIL, Lemon Tree, Indian Hotels, Easemytrip)

Anand Ramanathan, Partner and Consumer, Products & Retail Leader, Deloitte India

Focus on e-commerce hubs will help the D2C ecosystem including small vendors and aggregators to bring in greater efficiency in their operations and improve accessibility to markets including exports.

Moin Ladha, Partner, Khaitan & Co 

Keeping the promise of Viksit Bharat, the government has not left the MSME sectors behind. The budget promises to prioritise strengthening and aiding the MSME sector by introducing credit guarantee schemes, continuing guarantee covers during stress period and developing e-commerce hubs for MSMEs to compete in the global market. With India being the hub of global trade, empowering small and medium businesses will be a step towards our mission of continued growth

Sidhhesh Mehta, Research Analyst, SAMCO Securities

The Skilling Program will train 20 lakh youth over five years through industry-designed courses, enhancing employability and addressing skill gaps. These initiatives will reduce unemployment, increase disposable income, and stimulate economic growth, promoting a more inclusive and skilled workforce. This is a positive for NIIT Ltd and Aptech

The Skilling Program will train 20 lakh youth over five years through industry-designed courses, enhancing employability and addressing skill gaps. This is a positive for NIIT Ltd and Aptech: Sidhhesh Mehta, Research Analyst, SAMCO Securities

Moin Ladha, Partner, Khaitan & Co-

“The government has announced schemes to provide (i) education loans of up to INR 10 lakhs for students studying in domestic institution with an interest rate of 3%, and (ii) loans of up to INR 7.5 Lakhs for individuals backed by guarantee from a government fund for promoting business skill development. The schemes are in line with government’s other schemes to make India ‘aatmanirbhar’ such as Make in Bharat and establishment of GIFT City to encourage investments in India. This will not only reduce foreign exchange spending but will also provide relevant opportunity to students for growth /employment and evaluations entrepreneurial opportunities.”

The MSME sector in India is estimated to have a significant funding shortage of Rs 20-25 lakh crore. Banks account for 75% of lending to this segment. Public sector banks will do well to set up in-house, technology-driven underwriting capacity to serve new borrowers and bring them into the formal credit fold. - CRISIL

Adani Green Energy (3.13%)

Borosil Renewables (9.84%)

Sterling and Wilson Renewable Energy (1.62%)

Inox Wind Energy (1.11%)

Suzlon Energy (4.88%)

Budgetary announcements 

To focus on relief on stamp duty by states for women ownership. Increased outlay under PM Awaas Yojna. 

(Supportive for Ajmera, Prestige, Godrej Prop, HUDCO, GIC HSG, PNB Housing, Repco Home etc)

Budgetary announcements 

To focus on water supply and solid waste management. 

Focus on VaTech, Antony waste, etc

Construction, infra stocks gain as FM Nirmala Sitharaman announced significant infrastructure developments for Bihar, including new airports, medical facilities, and sports infrastructure.

The establishment of 10,000 need-based bio-inputs units will support the area under organic farming, which has increased at a compound annual growth rate of 23% between 1990 and 2023. This comes at a time when chemical fertilisers have been significantly affecting the crop response ratio (quantity of fertilisers used versus yield) — CRISIL

Finance Minister announces improvements in the agriculture industry by Digitizing public infrastructure for their lands within 3 years for 6 crore farmers in partnership with states. Benefiting companies like CDSL, CE Info Systems, Genesys etc: T Manish, Research Analyst, SAMCO Securities

Finance Minister Nirmala Sitharaman announced Research based setups for raising productivity & Developing climate resistant crops. Providing new 109 climate resistant crops in 32 categories to be developed and released. Companies like Kaveri Seeds, Dhanuka Agritech would be the beneficiaries: T Manish, Research Analyst, SAMCO Securities

Moin Ladha, Partner at Khaitan & Co on budget announcement -

“Start up if incentivised well will be able to improve the distribution/funding and profitability for agricultural produce. This being one of the key focus areas in this budget.

Special incentives for manufacturing sector which is anyways labour intensive will make the sector more attractive for foreign direct investment and will fosters growth of this sector. However this being limited to first time employees will create a challenge regarding the ability of such employees to be involved in skilled jobs as there would be limited practical experience.

This could therefore limit the impact of these incentives.”

SAMCO Securities, T Manish, Research Analyst, SAMCO Securities

The Finance Minister announces improvements in the agriculture industry by Digitizing public infrastructure for their lands within 3 years for 6 crore farmers in partnership with states. Benefiting companies like CDSL, CE Info Systems, Genesys etc

FM says:

Stock In Focus:

Skilling & Employment :

NIIT

Aptech

Teamlease

Veranda

Quess

Setting up of digital agriculture infrastructure, annual digital crop survey and mapping of farmers to their land parcels will facilitate better credit risk assessment, and enhance formal credit penetration in agriculture, which stands at around 60% today. — CRISIL

Focus on AP-based cos such as Andhra Sugar, Andhra Paper and Andhra Cement

Anand Ramanathan, Partner and Consumer, Products & Retail Leader, Deloitte India 

The budget focuses on important areas such as Crop resistant seed variety distribution, scaling digital public infrastructure and natural farming which will improve farm level productivity. Mission for self sufficiency in pulses, encouraging shrimp production and focus on vegetable production clusters will help in aligning production to emerging changes in consumption of fresh produce and proteins.

Zydus receives final approval from USFDA for Valsartan Tablets

Zydus stock declines 1.91% on the NSE, trading at ₹1,132.50.

The Finance Minister announced employment-linked skilling through schemes as part of the PM’s package. These schemes will be based on enrolment in the EPFO, focusing on recognizing first-time employees. First-timers will receive one month’s wage upon entering the workforce in all formal sectors. A direct benefit transfer (DBT) of one month’s salary, up to Rs 15,000, will be provided in three instalments. The eligibility limit for this benefit will be a salary of Rs 1 lakh per month, and it is expected to benefit 2.1 lakh youths.”

-1.52 lakh crores for Agriculture & Allied sector 

-Focus on Natural Farning

-Release of National Cooperation Policy 

-Prioritizing Agricultural research

Anand Ramanathan, Partner and Consumer, Products & Retail Leader, Deloitte India 

Crop resistant seed variety distribution, natural farming, self sufficiency in oilseeds and pulses, vegetable production clusters, digital public infrastructure for agriculture, scaling of digital crop surveys, shrimp production and export, cooperative sector, 1.52 lakh crores allocation for agriculture