Corporate winners and losers from India's budget

Unitech

10/07/2014 11:39

July 10 (Reuters) - Indian Prime Minister Narendra Modi's 
new government on Thursday unveiled its first budget of 
structural reforms aimed at reviving growth, winning praise from 
investors despite a lack of clarity over how it would cap the 
big fiscal deficit. 
    Modi's government, in office for less than two months, said 
it would raise caps on foreign investment in the defence and 
insurance sectors, and launch a tax reform to unify India's 29 
federal states into a common market.  IN:nL4N0PL1MD  
    The following sectors/companies will benefit or be impacted 
by the budget proposals: 
     
    WINNERS: 
    * Increase in foreign direct investment cap in the insurance 
sector to 49 percent from 26 percent now will benefit companies 
such as ICICI Bank Ltd  ICBK.NS , Max India Ltd  MAXI.NS , 
Housing Development Finance Corporation Ltd (HDFC)  HDFC.NS   
that have insurance ventures with foreign partners. 
    * Real estate companies such as DLF Ltd  DLF.NS , Unitech 
Ltd  UNTE.NS , Phoenix Mills Ltd  PHOE.NS , Parsvnath Developers 
Ltd  PARV.NS  will benefit from the proposal to provide 
incentives for setting up real estate investment trusts. 
    * Plan to develop 100 smart cities and increase in 
allocations to support rural housing will help developers and 
housing finance companies such as HDFC, LIC Housing Finance Ltd 
 LICH.NS  and Dewan Housing Finance Corp Ltd  DWNH.NS . 
    * The proposal to allow manufacturing units to sell products 
via e-commerce platforms is likely to benefit the local units of 
 foreign retailers such as Nike Inc  NKE.N , Marks and Spencer 
Group  MKS.L  and Puma SE  PUMG.DE . 
    * Insurance and asset management companies will gain from a 
proposal to increase the tax exemption limit on certain 
investments to 150,000 rupees from 100,000 rupees per year. 
    * Companies such as Larsen & Toubro Ltd  LART.NS , IL&FS 
Transportation Networks Ltd  ILFT.NS  and IRB Infrastructure 
Developers Ltd  IRBI.NS  will benefit from plans to increase 
spending to build roads and ports. 
     
    LOSERS: 
    * A proposal to increase excise duty on cigarettes is 
negative for companies such as ITC Ltd  ITC.NS  and VST 
Industries Ltd  VSTI.NS . Cigarette makers usually pass on any 
tax hikes to consumers, which may impact sales. 
    * A more than $2 billion tax dispute between Vodafone Group 
PLC  VOD.L  and the Indian government will likely drag on after 
the finance minister did not propose revoking a controversial 
retrospective tax rule change in 2012.  
    Vodafone said in a statement on Thursday it intended to push 
ahead with international arbitration to resolve the dispute. 
    * No change in import duty on gold and silver from the 
current 10 percent is negative for companies such as Titan 
Company Ltd  TITN.NS  and Gitanjali Gems Ltd  GTGM.NS  as some 
had expected a cut.  ID:nL4N0PL2Q9  
 
 (Reporting by India Company News team; Compiled by Devidutta 
Tripathy; Editing by Sumeet Chatterjee and Miral Fahmy) 
 ((devidutta.tripathy@thomsonreuters.com)(+91 84518 
40430)(Reuters Messaging: 
devidutta.tripathy.thomsonreuters.com@reuters.net)) 
 
Keywords: INDIA BUDGET/COMPANIES