Several New-Age start-ups like Zomato, Swiggy, NYKAA and Ola Electric saw a surge in their stock prices post Finance Minister Nirmala Sitharaman’s Budget presentation. These start-ups, serving primarily the middle class demographic of India have seen this surge after the finance minister revised the income tax slabs and announced a new fund of fund scheme with a fresh allocation of ₹10,000 crore.
Shares of Zomato and Swiggy surged around 5% in the NSE hitting the day’s high of 233.25 and 433.80 respectively, right after the budget presentation. Similarly, NYKAA and Ola Electric Mobility rose around 4.5% and 2% respectively.
Shares of some new-age start-ups like Paytm, PolicyBazaar and Delhivery fell by around 1.6%, 5% and 2% respectively, post budget presentation.
Nifty FMCG also witnessed an exponential surge of around 3% after being in the red territory for most of 2024, signifying the market optimism for the sector.
More Disposable Income Post Revised Tax
Following up on her commitment to the middle class made in the previous budget, the finance minister in her presentation announced a major income tax revision. The income tax threshold has been extended from Rs 7 lakh to Rs 12 lakh.
This will increase disposable income in the hands of the middle class, enabling increased spending in food, fashion, e-commerce and general services. The government, under the leadership of the Prime Minister, has always recognized the efforts of the middle class," said Nirmala Sitharaman while making the announcement.
"The middle class provides strengths to the economy. In recognition of their contribution, we have periodically reduced the tax burdens. I am now happy to announce that there will be no income tax up to an income of Rs 12 lakhs," the finance minister added.
Investment Boost for Start-Ups
In another announcement in the budget presentation, the finance minister promised to set up a new fund of funds with an additional Rs 10,000 crore, in addition to the existing government contribution of Rs 10,000 crore. The increased investment in the sector has heightened positive sentiment in the investors, thus the stock price surge.
“The Alternate Investment Funds (AIFs) for startups have received commitments of more than 91,000 crore. These are supported by the Fund of Funds set up with a Government contribution of 10,000 crore. Now, a new Fund of Funds, with expanded scope and a fresh contribution of another 10,000 crore will be set up. ” the Finance Minister said in her speech.
The Sidbi Fund of Funds is a flagship scheme under the government's Startup India initiative. Launched on January 16, 2016, the fund invests in Alternative Investment Funds (AIFs), rather than directly funding startups. To date, Sidbi has facilitated capital commitments for 144 AIFs, according to its data.
