Realty stocks end up to 9% higher post Budget

Real estate stocks ended as much as 9 per cent higher after the government today proposed tax incentives for investment instrument REITs.
Shares of DLF advanced by 9.22 per cent, while Prestige Estates Projects rallied 6.86 per cent, HDIL zoomed 5.25 per cent and Indiabulls Real Estate was up 5.04 per cent.
Similarly, Sobha Developers was up 2.73 per cent and Oberoi Realty climbed 1.79 per cent on the BSE.
Following the sharp uptick in these stocks, the BSE realty index ended 4.96 per cent higher at 2,009.72 and was the biggest gainer among the 12 sectoral indices.
"Reforms in REITs will support the realty stocks," said Kiran Kumar Kavikondala, Director & CEO, WealthRays Securities.

In a major boost for real estate sector, the government today proposed tax incentives for new investment instrument -- REITs to help attract long term funds from foreign and domestic investors, including the NRIs.

The government has proposed incentives for Real Estate Investment Trusts(REITs) which will have pass through for the purpose of taxation.
Announcing this during his maiden Budget Speech in the Lok Sabha today, Finance Minister Arun Jaitley said that REITs have been successfully used as instruments for pooling of investments in several countries.
As an innovation, a modified REITs type structure for infrastructure projects is also being announced as Infrastructure Investment Trusts(InvITs) which would have a similar tax efficient pass through status, for PPP and other infrastructure projects.

These structures would reduce pressure on the banking system while also making available fresh equity.
The FM exuded confidence that these two instruments would attract long term finance from foreign and domestic sources including the NRIs.