Budget 2019 solid, includes path-breaking ideas, says Saurabh Mukherjea of Marcellus Investment Managers

Finance minister Nirmala Sitharaman's first Budget is solid and consists path-breaking ideas if implemented, said Saurabh Mukherjea of Marcellus Investment Managers, during a panel discussion with CNBC-TV18.

“She (FM) is saying that the government is looking at labour reforms, four labour codes are apparently being looked at. That is truly remarkable given how difficult labour reform has been in India over the last 40 years. Secondly, she is saying the government is considering going below 50 percent in certain public sector enterprises which has been another holy cow for Indian governments over the last 40-50 years. So, if either of these two come to pass, then that is a big step forward," he said.

The panel also included Nilesh Shah, MD & CEO of Envision Capital; Navneet Munot, CIO of SBIMF; Nilesh Shah, MD of Kotak Mahindra Asset Management; Aditya Narain, head-Research of Edelweiss Securities.

On non-banking financial companies (NBFCs) issue, Nilesh Shah of Kotak Mahindra Asset Management said, “There are two parts. One is the liability side stress, other is the asset side stress. Asset side stress is essentially coming to those NBFCs who have real estate developer exposure. If this affordable housing increase of Rs 1.5 lakh interest subvention creates the demand in the real estate sector, to that extent, asset side stress in NBFC will come down."

Talking about minimum shareholding coming to 36 percent, Munot said, “I do not think that today’s market move has to be completely ascribed to what happened in the budget, there are so many good things there... the other way to look at it is that promoter holding as a percentage of the overall shares is much higher in India relative to most of the other markets. This will bring in a lot more discipline, this will bring in a lot more shareholding into the market which is structurally good.”

Nilesh Shah of Envision Capital said, “I think the pluses for the stock market are clearly the focus on short term challenges – areas like NBFC, housing finance companies (HFCs), the stress in the housing sector, I think a lot has been done out there and I think that will take away some of the stress which is there in the short term for the economy."

In terms of NBFCs, Narain further mentioned, “To start with, it is a good intervention. The second thing is the real efficacy of the intervention will lie if it is targeted at some of the NBFCs that are a little bit pushed to the wall rather than the ones which are sitting right on top which have this option in any cases. So the efficacy of how it is executed, how quickly it is executed will make the difference."