10 Companies to Gain from the Budget 2012

Bangalore: The Union Budget is the most important annual economic event in India.  Several sectors in the country depend on the government’s plan, expenditure patterns and fund raising. Therefore, budget has a huge effect on investment policy decisions of many companies.

According to Corporate India's point of view, the Budget for 2012-13 was high on hopes but low on details. The Finance Minister spoke of the requirement to decrease subsidies and restraint the budget deficit but little was talked about on how this is to be done.

Even though the Budget leaves a lot to be desired, there are some that stand to gain in some way. The Economic Times has listed the companies that are in a situation to gain from the Budget for 2012-13.

ADANI POWER

Adani Power will gain from the move to allow External Commercial Borrowings (ECBs) to part finance rupee debt. It had a debt of around 25, 000 crore as on 30th September 2011. In the December 2011 quarter, the company paid 14 percent of net sales as interest. Its EBIDT (Earnings Before Interest Depreciation and Tax) was 10 crore and the interest outgo was 139 crore.

The company can save up to 3 percentage points in interest rates with an access to foreign loans and a reduction in withholding tax from 20 percent to 5 percent. Adani Power can accelerate commissioning of its projects with the nod for 20 percent depreciation in the first year.
The budget has brought gains for the company on the fuel front as well. The company will source 66 percent of its coal from Coal India and the remaining from the international market, mainly Indonesia by 2015. Coal India has been advised to sign fuel supply agreements by the government. Complete exemption from customs duty for imported coal and a concessional CVD of 1 percent will make imported coal cheaper by 7-8 percent.