MUMBAI - Highlights of the Union Budget for 2017-18 (Apr-Mar), presented by Finance Minister Arun Jaitley in the Lok Sabha today: FY18 ESTIMATES * Pegs FY18 nominal GDP growth at 11.75% * FY18 fiscal deficit aim 3.2% of GDP * FY18 revenue deficit pegged at 1.9% of GDP * FY18 net market borrow pegged at 3.48 trln rupees post buyback * FY18 net market borrowing pegged at 4.23 trln rupees * FY18 gross market borrowing pegged at 5.8 trln rupees * FY18 gilt repayments 1.56 trln rupees * FY18 gilt buyback pegged at 750 bln rupees * To switch 405 bln rupees of gilts maturing in FY18 by Mar * Without buyback, FY18 net mkt borrow 4.23 trln rupees * FY18 total expenditure pegged at 21.47 trln rupees * FY18 divestment receipts pegged at 725 bln rupees * Capital expenditure allocation up 25.4% in FY18 * Transfer of resources to states, UTs at 4.11 trln rupees * Allocate 2.74 trln rupees for defence, excluding pension * Outlay for scientific ministries at 374.35 bln rupees * FY18 PSU divestment receipts pegged at 465 bln rupees * FY18 strategic sale receipts pegged at 150 bln rupees * FY18 receipts from listing of insurance PSUs 110 bln rupee * FY18 gross tax revenue pegged 11.3% of GDP * FY18 small savings receipt pegged at 1 trln rupees * FY18 net short term borrowing at 20 bln rupees * FY18 gross tax revenue seen 19.12 trln rupee, up 12.2% * FY18 tax-GDP ratio seen 11.3% * FY18 corporation tax mop-up seen 5.39 trln rupees * FY18 total income tax mop-up seen 4.41 trln rupees * FY18 excise duty mop-up seen 4.07 trln rupees * FY18 total customs duty mop-up seen 2.45 trln rupees * FY18 total service tax mop-up seen 2.75 trln rupees * FY18 fertiliser subsidy pegged at 700 bln rupees * FY18 revenue expenditure pegged 18.4 trln rupees * FY18 fiscal deficit pegged at 5.46 trln rupees * FY18 telecom revenue with spectrum seen 443 bln rupees * FY18 PSU dividend seen 675 bln rupees * FY18 RBI surplus, PSU bank dividend seen 749 bln rupees * FY18 capital expenditure pegged 3.1 trln rupees, up 10.7% * FY18 revenue expenditure pegged 18.4 trln rupees, up 5.9% * FY18 food subsidy pegged at 1.45 trln rupees * FY18 petroleum subsidy seen at 250 bln rupees * FY18 revenue deficit pegged at 3.21 trln rupees * FY18 major subsidies pegged at 2.4 trln rupees * FY18 total subsidies pegged at 2.72 trln rupees * Allocates 649 bln rupees for road transport ministry * Allocates 68.87 bln rupees for water ministry, Ganga plan * Allocates 342.12 bln rupees for urban development ministry * Allocates 54.73 bln rupees for renewable energy ministry * Allocates 64.06 bln rupees for housing ministry * Allocates 271.31 bln rupees for National Health Mission * Allocates 60.50 bln rupees for rural drinking water plan * Allocates 295.56 bln rupees for National Education Mission * Allocates 22.5 bln rupees for National Ganga plan * Allocates 180 bln rupees for metro rail projects * Allocates 35 bln rupees for price stabilisation for pulses * Allocates 6 bln rupees for Sagarmala project * Allocates 25 bln rupees for LPG connection for poor * Allocates 100 bln rupees for National mid-day meal scheme * Allocates 90-bln-rupee for smart cities, urban renewal plan * Allocates 162.5 bln rupees for Swachh Bharat plan * Allocates 207.6 bln rupees for integrated child dev plan * 2 bln rupee to farm min for mkt intervention, price support * 35 bln rupees to consumer min for price stabilisation fund * FY19 revenue deficit target 1.6% of GDP * FY19, FY20 fiscal deficit target at 3.0% of GDP * FY20 revenue deficit target 1.4% of GDP FY17 REVISED * FY17 fiscal deficit revised to 3.2% of GDP * FY17 fiscal deficit pegged at 5.34 trln rupees * FY17 revenue deficit revised to 2.1% of GDP * Advanced tax in personal income up 34.8% so far FY17 * FY17 net tax mop-up to grow by over 17% for 2nd year running * FY17 gilt buyback/switch pegged at 1 trln rupees POLICY * To abolish FIPB in FY18; roadmap to be finalised in few months * Further liberalisation of FDI under consideration * To launch trade infrastructure export scheme FY18 * Mission to bring transformative shift in governance * Underlying theme of our govt was good governance * Moved to a system, policy-based administration * Massive war against black money has been launched * Govt moved from blanket entitlement to targeted delivery * India considerably improved policies, econ profile * GST, demonetisation two "tectonic" changes for economy * Witnessed historic econ reforms in last one year * Prudent fiscal management to be one of 10 themes of Budget * FY18 Budget approach has been to spend more on rural areas * Presenting FY18 Budget early to avoid Vote on Account * Transform, energise, and clean India agenda for next year * To focus on public service, effective governance * Aim to provide relief to middle class, curb black money * Demand to get boost from accommodative monetary policy * Computer emergency response team for cyber security * To allocate more funds to recapitalise PSU banks if needed * To rationalise number of tribunals by merging some * Panel on FRBM for far reaching structural reforms * Focus on maintaining best standards of fiscal prudence * To use head post office as front office for passport service * To have comprehensive web-based system for defence pensions * To make 50,000 gram panchayats poverty free by 2019 * Efforts to reorient MGNREGA to double farm income * 480 bln rupees for MGNREGA FY18 * Spent 470 bln rupees on MNREGA FY17 * 500,000 ponds to be dug up under MGNREGA FY18 * Will use space technology to plan MGNREGA projects * Allocation for rural agri, allied sector 1.87 trln rupees * FY18 rural farm, allied sector outlay at all-time high * Focus on removing non-transparent political funding * Political parties can get funds by cheque or digital mode TAXATION * India largely a tax non-compliant economy * Halves income tax for 250,000-500,000 rupee slab to 5% * 10% surcharge on taxable income of 5-10 mln rupees * 15% surcharge on taxable income above 10 mln rupee remains * Net revenue loss on direct tax at 200 bln rupee FY18 * To set up one Advance Ruling body for direct, indirect tax * Committed to make tax rates reasonable, expand tax base * Extend concessional withholding tax for debt until June 2020 * To allow carry-forward of MAT for 15 years from 10 years now * Long-term capital gain period for land, building 2 years now * Cut tax rate to 25% for cos with sub-500-mln-rupee turnover * 96% of Indian cos to get benefit of lower corporate tax * Tax rate cut to make MSME cos more viable * To cut basic customs duty on LNG to 2.5% from 5% * Revenue loss from low corporate tax for MSMEs 72 bln rupee * Cash transactions above 300,000 rupees banned * Cash donation limit for charity trusts cut to 2,000 rupees * Announces tax sops for manufacture of digital pay devices * Efforts needed to clean political funding system * Removes 5% tax deduction at source for insurance agents * To reduce levies on point-of-sale machines * GST Council has finalised almost all recommendations * Not many changes in indirect tax due to upcoming GST * No significant gain or loss on indirect tax * Ups excise duty on pan masala to 9% from 6% * Ups excise duty on unmanufactured tobacco to 8.3% from 4.2% * Ups excise on handmade paper-rolled bidi to 28 rupee/1000 * Ups excise on machine made paper-roll bidi to 78 rupee/1000 * Cuts excise duty on raw material for solar-tempered glass * Levies 6% excise duty on solar-tempered glass * Ups additional excise duty on some cigarette categories * Ups additional excise on gutkha, chewing tobacco to 12% * Ups customs duty on cashew nut to 45% from 30% * Scraps customs duty on nickel * Levies 12.5% countervailing duty on silver medallion, coin MACROECONOMY * Will ensure fruits of growth reach the vulnerable * India seen as engine of global growth * Govt has replaced sluggish growth with high growth * To take many more steps to ensure growth reaches all * India 6th largest manufacturing country, up from 9th * India's macro-economic stability the foundation of success * India FX reserves comfortable to cover for 12 month of imports * Govt has pursued path of fiscal consolidation steadily * To have fiscal consolidation without compromising on expenses * Increased capacity of banks to lend at cheaper rates * Surplus liquidity in banking system to boost credit access * Expect CPI inflation to remain in RBI's mandated 2-6% range * Inflation controlled, high growth replaced sluggish growth * FDI at 1.45 trln rupees in Apr-Sep * India at an important point in growth, development path * Pickup in economy premised on policy, economic reforms DEMONETISATION * Demonetisation a bold and decisive measure, seeks to create a new normal * Demonetisation aims for bigger, cleaner, more real GDP * Note ban aims to transfer resource from tax evaders to govt * Economic activity slowdown post demonetisation to be transient * Tax evasion created an unacceptable parallel economy * Demonetisation will up GDP growth, tax revenues * Demonetisation will lead to greater digitisation of economy * Demonetisation, GST to have epoch-making impact on Indians * Effects of demonetisation won't spill over to next year * Banks' surplus liquidity post note ban to lower borrow cost * Surplus liquidity in banks to boost credit growth * Pace of remonetisation has picked up * Remonetisation to soon reach comfortable level FINANCIAL MARKETS * FPIs exempt from category I, II of indirect transfer norms * To introduce Bill for resolution of financial firms in FY18 * Expert panel for integrated spot, futures commodity market * Moots amendment to RBI Act for issuance of electoral bonds * Draft bill to curb illegal deposit scheme ready * To revise norms for time-bound listing of central PSUs * Released mechanism for time-bound listing of PSUs * Listing of PSUs to unlock true value of enterprises * IRCTC, IRCON, IRFC to be listed * To create a new ETF with diverse PSUs FY18 * To continue use of ETFs for divestment BANKS, FINANCIAL SECTOR * Allots 100 bln rupees to recapitalise PSU banks as per plan FY18 * PM Mudra Yojana lending target doubled to 2.44 trln rupees * Exceeded Mudra Yojana FY17 lending aim of 1.22 trln rupee * India on the cusp of massive digital revolution * 12.5 mln users have adopted BHIM app * To start referral bonus, cash-back plan to promote BHIM payment app * Merchant version of Aadhaar-enabled payment scheme shortly * Digital payment infra to be strengthened * Aim 25 bln digital transactions via digital payment schemes * Banks to set up 1 mln new point-of-sale terminals by March * To strengthen financial inclusion fund * Aim 2 mln Aadhaar-based point-of-sale terminals by Sep * Moot payment regulatory board under RBI * To review law to encourage digital payments * Mull only digital payments beyond a level for govt receipts * To work to implement proposals of CM digital payments panel * To amend law to provide relief to dud cheque receivers * Mull legislation to confiscate assets of econ offenders INDUSTRY * Propose to create integrated public sector oil major * To set up strategic crude oil reserves in Rajasthan, Odisha * Total strategic oil reserve capacity to rise to 15.3 mln tn * To focus on infrastructure development * To launch Incredible India phase-2 across the world * Textile, leather, footwear to get cluster development plan * To have special job scheme for leather, footwear sector * Got 250 proposals for electronic manufacturing worth 1.26 trln rupee * Trade export infrastructure scheme to be launched FY18 * 190 bln rupees allotted for PM rural road plan FY18 * PM road plan built 133 km/day in FY17 * Propose to create 10 mln houses for the houseless by 2019 * To achieve 100% rural electrification by May 1, 2018 * PM housing plan allocation raised to 230 bln rupees FY18 * Rural road plan outlay along with states 270 bln rupees * National Housing Bank to refinance 200-bln-rupee loans FY18 * Allocate 2.41 trln rupees for overall transport sector FY18 * Allocate 640 bln rupees for national highways FY18 * To amend Airports Authority Act to monetise land assets * Airports in Tier-2 cities to be taken on PPP mode * 100 bln rupees allocated for BharatNet * Allocate 3.96 trln rupees for infra FY18 * To link low-cost housing sop to carpet, not built-up, area RAILWAY * Merger of rail, general Budget a historic step * Functional autonomy of railways to continue * Indian Railways capital expenditure 1.31 trln rupees FY18 * FY18 Budget allocation for railways at 550 bln rupees * To create rail safety fund of 1 trln rupees over 5 years * Railway lines of 3,500 km to be commissioned in FY18 * Unmanned level crossings to be eliminated by 2020 * 500 railway stations to be made disabled friendly * 25 railway stations to be redeveloped FY18 * Railways face stiff competition from other transport modes * All rail coaches to have bio toilets * Railway throughput to be enhanced by 10% in 3 years * Railway to offer competitive ticket booking service * Service charge on rail e-tickets via IRCTC to go * 7,000 railway stations to be solar powered in medium term * New metro rail policy to be announced * Rail tariff to be fixed with eye on competition * Rail to become end-to-end transport for some commodities * Rail to involve private logistic companies for end-to-end transport FARM SECTOR * Commodity prices uncertainty a risk for emerging econ fisc * Will double farm income in 5 years * Agriculture sector expected to grow at 4.1% in FY17 * Target farm credit at 10 trln rupees FY18 * Will try to take farm loans to remote areas * Will support NABARD to digitise 63,000 primary agricultural co-ops * Cost of digitising agriculture co-ops 19 bln rupees in 3 years * NABARD to get 50 bln rupees to set up micro irrigation fund * To up crop insurance coverage to 40% FY18 vs 30% now * To up crop insurance coverage to 50% FY19 * To double long-term irrigation fund corpus to 400 bln rupee * National agriculture markets to be expanded to 585 markets * 7.5 mln rupees to each APMC under e-NAM * To form modern law for contract farming * Over 3 trln rupees spent on rural programmes every year * To set up dairy processing fund * Dairy processing fund initial corpus at 20 bln rupees * Dairy processing fund corpus to be 80 bln rupees over 3 years * States to denotify perishables from APMC Act SOCIAL SECTOR * To strengthen social security system * To energise youth through education, job creation * Focus on energising youth to provide them with jobs * Innovation Fund to be created for secondary education * Sanitation in villages near 60% from 42% in Oct 2014 * To up allocation to Deen Dayal rural plans to 45 bln rupees * To provide safe drinking water to polluted areas in 3 years * To introduce measure of annual learning outcomes in schools * To bring plan to assess annual learning outcome in schools * To set up agency for entrance exams for higher education * TO have outcome-based accreditation of colleges * Allocate 40 bln rupees for skill acquisition programme * Affordable housing to get infra status * Allocation for women, children 1.84 trln rupees FY18 * 5 bln rupees marked for women empowerment * Aim to eliminate leprosy by 2018, TB by 2025 * Two new AIIMS to be set up in Jharkhand, Gujarat * New rules regarding medical devices will be formulated * Committed to transform medical training, administration * To amend rules on drugs, cosmetics to control prices * 150,000 health sub-centres to become health wellness centre * To bring reforms to simplify, rationalise labour laws * To create 5,000 more seats for medical courses * Allocate 523.93 bln rupees for Scheduled Caste schemes FY18 * Allocation for scheduled caste welfare 524 bln rupees * Allocation for scheduled tribe welfare 319 bln rupees * Allocation for minority affairs 41.95 bln rupees * To bring Aadhaar-based health cards for senior citizens * LIC to launch assured pension income for the elderly at 8% EXTERNAL FACTORS * US Fed stance on rate hike may lead to capital outflows * US Fed policies are a challenge * Protectionism may hit export from emerging markets like India * US Fed's monetary policy stance may cause lower capital inflow * Signs of retreat from globalisation on rising protectionism * Present this Budget amid global uncertainty * India stands out as a bright spot in global econ scene * Economy has weathered external shocks End
Wednesday, 1 February 2017
Wednesday, 18 January 2017
BSE LIMITED IPO
Established in 1875, BSE (formerly known as Bombay Stock Exchange Ltd.), is Asia's first stock exchange. At the end of October 2016, BSE is the World's Largest Exchange by number of Listed Companies and India's Largest and the world's 10th Largest Exchange by Market Capitalization, with US$ 1.7 trillion in total Market Capitalization of Listed Companies.
As the operator of the BSE, it regulates listed issuers and provides a market for listing and trading in various types of securities as may be allowed by SEBI from time to time.
BSE operates in three primary lines of business, viz:
1. The listing business, which consists of the primary market, which relates to the issuance of new securities; 2. the market business, which consists of (i) the secondary market, (ii) BSE StAR MF ("BSE StAR"), our online platform for the placement of orders and redemptions of units in mutual funds, (iii) NDS-RST, our platform for the reporting of over-the-counter corporate bond trading,
(iv) membership, which includes membership in the Exchange, membership in our clearing corporation ICCL, and depository participants in our depository CDSL, and
(v) post-trade services, namely the clearing corporation and depository; and 3. the data business, which consists of the sale and licensing of information products.
1. Strong brand recognition with a track record of innovation
2. Diversified and integrated business model and active relationship with market participants
3. State of the art Infrastructure & Technology
4. Financial Strength and Diversified source of Revenue
Objects of the issue
1. To achieve the benefits of listing the equity shares on NSE and2. For the sale of Equity shares by Selling Shareholder.
The First Multi-Platform Stock Exchange to get listed is the great opportunity for the investors to invest. BSE derives revenue from different sources which is increasing YOY. On valuation part the company posted Revenue has grown from ` 578 Cr. to ` 658 Cr. in the last 5 years.
At the Upper Price band of 806, P/E comes to around 35x and EPS of 22, which when compared to Peer (MCX) seems reasonably priced.
The BSE has got license to commence commodity business and plans to set up a Global Exchange at GIFT city in Gandhinagar. Around 300 members have consented to setup their offices at the new venue. BSE is one of the most recognizable brand names in India. This global brand helps in attracting companies to list on the exchange, attracting retail and wholesale participants to various market offerings.
BSE is headed by the very able Mr. Ashish Chouhan. He is a complete technocrat and has led the exchange to leadership in various new segments. We recommend investors to invest in this IPO issue with a medium to long term perspective.
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