💸 Angel Investing Could Get a New Rulebook

☀️ Happy Tuesday — the tea is piping hot!

If Monday's market dip gave you whiplash, you're not alone. Between trade tantrums, regulatory curveballs, and a full-blown startup soap opera, India Inc. is brewing more drama than a daily soap. Don’t worry—we’ve broken it all down so you can sip your masala chai and sound smarter than the Sensex 😎☕

Let’s stir it up 👇

🫖 Chai Shots

• 🧾 LLPs May Get Tax Relief After All: The Finance Ministry is working to correct drafting glitches in the new Income Tax Bill that would have inadvertently slapped LLPs with an 18.5% Minimum Alternate Tax—sparking panic across firms and family offices. Officials insist there’s no change in tax policy and that the fix will be included before the bill is tabled, likely in the Winter Session.

• 🛰️ Starlink’s India Debut Gets User Cap, Pending Spectrum Clarity: Elon Musk’s Starlink is getting a soft landing in India with a hard cap—only 20 lakh users will be allowed, according to Telecom Minister P. Chandra Sekhar. At ₹3,000+ per month, the service won’t undercut local telcos but is expected to serve remote and underserved regions.

• 🦄 SEBI’s Angel Investor Rules Could Cool Early-Stage Momentum: With over $1B committed to Indian startups by angels this year, SEBI’s proposed move to require “accredited” investor status for participation in large angel funds may reshape the landscape. The shift could make capital less accessible to early-stage startups if not paired with streamlined processes. More in the Big Brew 👇

• ⚖️ Delhi HC Refers PhysicsWallah vs Scholars Den Spat to Mediation: The Delhi High Court has asked PhysicsWallah and rival Scholars Den to settle their defamation dispute through mediation after Scholars Den called PW “Sasta Wallah” in its ads. Scholars Den has agreed not to run the ads again, while PW accused them of targeting its centres directly. The mediation is scheduled for July 31, as PW readies for its IPO.

📈 Market Masala

• 📉 Markets Dive as Trade Talks Stall, Earnings Disappoint, and Layoffs Rattle IT: Sensex tumbled 572 points and Nifty slipped below 24,700 amid a cocktail of bad news: India–U.S. trade talks hit a wall, Kotak Bank posted weak Q1 results, and TCS confirmed it’ll lay off 12,000 employees.

  • IT and banking stocks led the fall, and foreign investors pulled ₹1,979 crore from the market. The broader market suffered too, with mid- and small-cap indices dropping up to 1.3%.

• 📉 Jane Street Asks SEBI for More Time in ₹36,500 Cr Derivatives Case: Accused of manipulating Indian markets through a complex ₹36,500 crore options play, U.S. prop trading giant Jane Street has requested extra time to respond to SEBI’s July 3 interim order. While the firm has parked ₹4,844 crore in escrow and received conditional trading relief, it's still under scrutiny for making ₹43K+ crore in gains by “deliberately” taking ₹7K crore in losses elsewhere.

• 🧵 Govt Nudges Textile & Leather Exporters to Seize UK Trade Pact Gains: Now that tariffs on Indian textiles and leather exports to the UK are officially scrapped, the Commerce Ministry is urging manufacturers to scale up fast. At a stakeholder meet, officials emphasized the need to strengthen logistics and meet rising demand in a post-Brexit UK keen to diversify from China.

• 🏅 RBI Buys More Gold as Returns Outshine Global Assets: The RBI added 400 kg of gold in June—its first bullion buy in three months. Gold is now India’s fastest-growing forex reserve category, up 26% YTD and making up 12% of the total reserve mix.

• 🚗 CCI Approves Renault’s Plan to Raise Stake in India JV with Nissan: Renault has secured regulatory clearance to increase its share in its Indian manufacturing JV to 51%, aiming to reboot its India strategy after dismal Q2 sales.

🌍 Global Masala

• ✈️ Singapore Airlines Hit by Air India Drag, Profits Tank 59%: Singapore Airlines’ net profit for Q1 fell nearly 59% to SGD 186 million (~₹1,140 crore), despite steady travel demand. The plunge was largely due to losses at Air India—where SIA owns a 25% stake—and reduced interest income as cash reserves fell. The airline is bracing for continued global headwinds, from supply chain issues to fluctuating oil prices.

🍵 The Big Brew 💰 SEBI’s New Accreditation Norms: A Double-Edged Sword for Startup Investing

India’s booming startup scene is finally seeing a healthy stream of early capital, with over $1 billion in angel investments this year alone. But proposed changes by the Securities and Exchange Board of India (SEBI) are sparking cautious conversations across the ecosystem.

To allow angel funds to onboard more than 200 investors, SEBI wants participants to qualify as “accredited investors.” That means proving a net worth of over ₹7 crore or annual income above ₹2 crore—a benchmark few have registered for, despite many qualifying on paper.

📌 What’s Changing:

• 🧾 Accreditation required for expanded participation: SEBI is looking to allow larger angel fund pools but wants safeguards in place through investor accreditation.

• 📉 India currently has just ~650 accredited individuals: Despite tens of thousands qualifying financially, very few complete the formal registration due to privacy and procedural concerns.

• 🔍 Disclosure reluctance is a hurdle: Wealthy individuals are hesitant to publicly document their financials, especially given increasing scrutiny around high-value transactions.

• 📜 Current rules already require risk disclosures: Some argue additional layers could be overkill, especially for a class of investors who are often experienced professionals or founders themselves.

🧠 What does this mean?

• 🚀 Startups could see early-stage capital slow: If angel funds shrink due to fewer accredited participants, pre-seed and seed rounds may become harder to close—especially outside of major metros.

• 🧑‍💼 Investors may opt out of the ecosystem: Those who prefer discretion might steer clear of accreditation entirely, reducing diversity in the cap table.

• 🔄 There’s room for reform: Investors are hopeful SEBI might introduce streamlined processes, like consent-based verification via ITRs, to make accreditation less burdensome.

• 🧨 A balancing act ahead: SEBI’s intent is to boost market confidence, but execution will be key to avoiding a bottleneck for one of India’s most vibrant investment channels.

Rather than stifling angel activity, this could be an opportunity to build a stronger, more transparent investment framework—if implemented with the right ease-of-use and education. The coming months will reveal how the ecosystem adapts.

🚀 Startup Scoop

• 🤖 Drizz Raises $2.7M to Revolutionize Mobile App Testing with AI: Founded by engineers from Meesho, Coinbase, and Amazon, Drizz just raised $2.7M to transform how apps are tested. The platform lets devs write end-to-end tests using plain English prompts, with AI that adapts to UI changes in real-time.

• 🧱 Hey Concrete Bags ₹7.5 Cr to Go Global with Sustainable Design: Udaipur’s Hey Concrete—known for aesthetic, eco-friendly concrete—has raised ₹7.5 crore from global facade expert Kamlesh Choudhari. With 30+ showrooms already in India, the startup now plans to build a high-tech factory and scale exports of its GreenPro-certified materials worldwide.

• 🧠 Astra, Backed by Aravind Srinivas, Shuts Shop Amid Cofounder Rift: AI-powered sales platform Astra, once dubbed the “chief of staff for account execs,” has shut down just months after raising capital from Perplexity’s Aravind Srinivas. Founder Supreet Hegde cited disagreements over growth and lack of enterprise trust as key reasons.

🧠 Chai Break Trivia

Did you know? 🥤 Thums Up was launched in 1977 as a homegrown response to Coca-Cola’s exit from India—and it became so dominant that Coca-Cola eventually bought it just to compete. Even today, it’s India’s top-selling cola, known for its bold taste and even bolder tagline: Taste the Thunder! ⚡

🔮 What’s Brewing Next

• 💼 August: SEBI vs Jane Street drama continues—more updates expected next month.

👋🏼 That’s a wrap!

Markets are moody, startups are shaking, and regulations are tightening—but we’re still here, brewing clarity from chaos ☕️
Whether you're reading this from a WeWork, your WFH balcony, or in line for filter coffee, remember: the best investors sip before they scroll.

Until tomorrow, stay calm and chai on!
—Masala Chai Team