What After budget:-
I have categorically said , don’t have any expectations on Tax reform, and the Budget will be a non-event to me. Market and everyone was waiting to hear from FM on Tax and the call is turned down. SO now let’s see what we got from the budget which can help us to align the investment accordingly. Budget is an event to align the portfolio and it always gives direction short term and that’s the opportunity for us to identify. So let me only highlight those areas which I feel will impact our investment decisions and how to en-cash the maximum from it.
The most positive from the budget for me is – Now income from Virtual assets (Read cryptocurrencies) will be taxed at 30%. This is a huge positive for the stock market. Needless to say, everyone invests to earn and Equity is taxed at 15% and 10%. Now, this is a huge gap upside which will surely discourage. Not only that, but also the loss cannot be adjusted with any other assets. No one invest to break the law but to earn, till now everyone was enjoying the income. India has seen a mouth-watering investment near $ 600 Million in cryptocurrencies. I am sure that this must come back to Equity. At least smart investors will shift. This is a booster for Equity Market.
India will issue sovereign Green Bonds for funding green infrastructure. Through this India is Targeting the climate-related Debt Market. India Needs almost $10 Trillion to be carbon–neutral till 2070. India already issued over $6 Billion Green bonds and worldwide the market has seen a growth of 65% YOY. This money will be used to fund green infrastructure.
25% of the annual Budget in Research and development of the defence will be reserved for private entities. This will end the monopoly of public sectors.
FM Revoked anti-dumping duties on certain steel products imported from countries including China so that domestic manufacturing can get a boost. – Needless to say metal will be a clear winner ( TATASTEEL Rallied today)
Govt considering battery swapping for electric cars rather than charging stations. This means swapping a discharged electric car battery with one that is already charged. This would replace recharging, thus eliminating long refuelling times – one of the major limitations of zero-emission vehicles.- Benefit for batteries as charging stations are no longer needed.
Rs 48000 Crore outlay for helping to build low-cost housing in both rural and urban regions across the country.
LTCG Surcharge decreased and capped at 15% other than equity and listed stocks, Means property, unlisted shares, – Clear benefit to NRI – Foreign funds and ESOP Holders of unlisted companies.
Additional $2.6 Billion to boost local manufacturing of solar modules. India has an ambitious plan of generating 280 Gigawatts through solar by 2030
So for me, Housing Finance, EV, Battery, power, Infrastructure will get the upper hand as a sector now to be more precise. Also, some sectors indirectly will be benefited like – Cement, Tiles, Pipes Etc.
To name some stocks – RITES, AGI INFRA, AMAR RAJA, NMDC, MAITHAN ALLOY, PSP PROJECTS, TATASTEEL
Now one thing I must mention that – I was very bullish on banks but now I will be very selective because LAUNCHING of Digital currency by Central Banks. This will be a game-changer, but banks will have to compete more fiercely to retain their edge. Margins on their traditional businesses are all going to shrink quite significantly. SO be very vigil on Banks only good technology and a large retail base may survive. I would now prefer NBFC rather than Banks.
On Market – Govt has given a business-oriented Budget. UP Election is another trigger, but this budget is not populist so might be Govt is not considering encouraging results in UP and getting prepared for the 2024 Election. Tax is not cut as they must keep income intact for spending. Moreover, if Govt fails to deliver on jobs then it will be over in 2024. So FM kept quiet on asset -sale and the target is being reduced. Other hand focusing on Rail – infrastructure ( 400 Vande Bharat Express and 100 Cargo terminals added as target) can have mass recruitment for the poor.
So we may see ups and downs but our Target 21000 Nifty is intact till 2024.