Budget 2026: STT Hike & Capex Push Shape Outlook for Inventure Growth

Introduction: A Mixed Bag for the Brokerage Industry

The Union Budget 2026, presented by Finance Minister Nirmala Sitharaman, has laid out a fiscal roadmap with significant implications for the Indian capital markets and firms like Inventure Growth & Securities Ltd. While the budget's strong emphasis on capital expenditure and manufacturing offers broad economic tailwinds, specific tax proposals present direct challenges and opportunities for the brokerage industry. Key announcements, including a hike in the Securities Transaction Tax (STT) and new rules for buybacks, create a complex operating environment for financial intermediaries.

The Direct Impact of the STT Hike

One of the most significant announcements for the brokerage sector is the proposed increase in STT. The budget raises the STT on futures contracts to 0.05% from 0.02% and on options (both premium and exercise) to 0.15%. For a company like Inventure Growth & Securities, whose revenue is closely tied to trading volumes, this is a direct headwind. Higher transaction costs can deter high-frequency traders and reduce overall activity in the derivatives segment, which is a major contributor to brokerage revenues across the industry. This measure could potentially squeeze margins and dampen the volume-driven growth that has characterized the market in recent years.

Navigating the New Buyback Tax Regime

Investor expectations for a simplification of the buyback tax were partially met with a structural change. The budget proposes to tax buybacks as capital gains for all shareholders, moving away from the buyback distribution tax paid by the company. However, to curb misuse, promoters will be subject to an additional buyback tax. This makes the effective tax rate 22% for corporate promoters and 30% for non-corporate promoters. While this may make buybacks more appealing for minority shareholders, the additional levy on promoters could limit the number of companies opting for this route. For Inventure, this change requires careful advisory for its corporate and HNI clients, with the overall impact on market activity remaining uncertain.

A Welcome Boost for Foreign Investment

On a positive note, the budget introduced measures aimed at attracting more global capital. The investment limit for individual Persons Resident Outside India (PROI) under the Portfolio Investment Scheme has been doubled from 5% to 10% of a company's equity, with the aggregate limit for all PROIs raised to 24%. Furthermore, the government has announced a comprehensive review of the Foreign Exchange Management Act (FEMA) non-debt instruments rules to create a more user-friendly framework. These steps are likely to enhance foreign participation, increase market liquidity, and drive higher trading volumes, potentially offsetting some of the negative impact from the STT hike.

Unmet Expectations for Retail Investors

Several key demands from retail and HNI investors were not addressed in this budget. There were no changes to the taxation of dividends, which continues to be a case of double taxation. The basic exemption limit for Long-Term Capital Gains (LTCG) was not increased, and the tax treatment for debt funds remains unfavorable. Similarly, the popular ELSS tax-saving instrument was not integrated into the new tax regime. The absence of these reliefs may temper retail investor sentiment, which is a crucial driver for brokerage firms like Inventure.

Macro-Economic Thrust Creates New Opportunities

Beyond direct tax measures, the budget's overarching theme is a powerful push for growth led by public investment. The capital expenditure outlay has been increased to ₹12.2 lakh crores for FY 2026-27. This, combined with dedicated schemes for strategic sectors like biopharma, semiconductors, chemicals, and textiles, creates clear investment themes. For Inventure Growth & Securities, this focus on infrastructure and manufacturing provides a strong pipeline of opportunities for its research, advisory, and broking verticals. Increased economic activity and corporate earnings growth in these sectors will likely fuel positive market sentiment and attract long-term investment capital.

Financial Context for Inventure Growth

These budget proposals come at a time when Inventure's own financials show a challenging environment. In Q2FY26, the company reported a decline in total income and profit after tax compared to the previous quarter. While it showed a year-over-year improvement from a net loss, the pressure on revenue is evident. The STT hike adds another layer of complexity to this scenario. The company's ability to leverage the macro-economic opportunities presented in the budget will be crucial to navigate the direct pressures on its core broking business.

Conclusion: Adapting to a New Reality

Union Budget 2026 presents a dual reality for Inventure Growth & Securities. The hike in STT is an undeniable challenge that will pressure trading volumes and revenues. However, the government's commitment to attracting foreign capital and driving growth through massive infrastructure spending provides a significant silver lining. The firm's path forward will depend on its strategic ability to adapt to the higher-cost trading environment while effectively guiding its clients to capitalize on the new growth sectors championed by the budget.