Budget 2021: Foreign money to give infra cos a lift

Mumbai: Infrastructure should get a significant boost from the reforms to ease foreign investments, likely enhancing the prospects of companies such as Larsen & Toubro, KNR Construction, UltraTech Cement, and DLF. The budget proposes to increase infrastructure allocation to Rs 5.54 lakh crore as against Rs 4.39 lakh crore in the revised estimates for FY21. There is also an additional support to states of Rs 2 lakh crore for capital expenditure and related programmes.

“To play the infra growth story, we prefer stocks like L&T, KNR Construction, UltraTech Cement, JK Lakshmi Cement, DLF, Ashok Buildcon, GAIL and JSW Steel,” said Gaurav Dua, head of capital market strategy, Sharekhan. “Along with budgetary allocation, the government proposes to set up a Development Financial Institution and monetise existing assets of public sector entities to reinvest in infrastructure projects.”

To attract retail and foreign investment, the government proposes to abolish tax deduction at source on REIT and InvIT and allow issuance of zero-coupon bonds by infrastructure firms. “The thrust on overall infrastructure sector would definitely bring fresh capital to play, create deep economic linkages and generate employment,” said Gaurav Taneja, partner, EY India.