Construction -Budget FY12 - A Preview -Anand Rathi Research

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Construction
The thrust on infrastructure spending, with a sharper focus on the
public-private partnership (PPP) model, clarity on takeout financing
and increase in investment limit of infrastructure bonds would be
positive for all construction companies.
Expectations
 We expect an increase in government outlay on infrastructure,
especially on roads and urban infrastructure
 As the current norms of IIFC takeout financing are not acceptable to
banks, clarity regarding such provisions.
 Improved availability and mechanism of financing for infrastructure
projects by creation of an infrastructure debt fund.
 Increase in investment limit of tax-free infra bonds, from `20,000
Impact
The increase in government outlay on infrastructure projects would be
positive for the construction sector.
Improved availability and mechanism of financing for infrastructure
projects by creating an infrastructure debt fund. Increase in investment
limit of tax-free infra bonds and clarity on takeout financing are likely to
ease funding requirements of the construction sector.
Companies affected
The increase in government outlay on infrastructure projects would be
positive for construction companies.
As the current norms of IIFC takeout financing are not acceptable to
banks, clarity regarding such provisions and tweaking norms in favour of
banks would be positive in funding for construction companies. Apart
from this, the creation of infrastructure debt funds and increase in
investment limit of tax-free infra bonds would be positive for all the
construction companies.