The long-term growth outlook for MTF remains intact due to rising investor adoption and its growing importance in brokers’ business models
The industry’s margin trading facility (MTF) book touched a fresh high of ₹1,43,722 crore on July 22, as investor appetite for leveraged cash-market positions remains strong even as the pace of growth has slowed from earlier months.The latest figure was led by NSE at ₹1,37,705 crore, while BSE’s MTF book stood at ₹6,017 crore. In June, the industry had ended with a record average MTF book of ₹1.36 lakh crore, up 7.1 per cent sequentially and 57.6 per cent year-on-year.The pace of growth slowed slightly to 5.1 per cent in July. CareEdge said the book had grown 11.1 per cent in May from April, after a 1.6 per cent rise in April.Average daily turnover across equity and derivatives remained largely flat sequentially in June after a sharp run-up earlier this year, with higher securities transaction tax (STT) on derivatives, easing market volatility and cautious investor sentiment weighing on activity. Cash market turnover also softened after three consecutive months of growth, said CareEdge Ratings.“The MTF book crossing ₹1.4 lakh crore itself indicates that investor appetite remains strong. The moderation in growth during July is not a concern; after a sharp run-up over the last few months, some cooling was always expected,” Ajay Garg, director and CEO at SMC Global Securities said.“Investors are becoming more selective as valuations turn richer and markets witness intermittent volatility, which is a healthy sign rather than a negative one,” he said.Room to growThe segment still has room to grow as retail participation in equities deepens. “MTF has emerged as a useful financing tool for informed investors. We expect growth to continue, although at a more sustainable pace than what we have seen recently,” Garg said.Shripal Shah, MD & CEO at Kotak Securities, said the industry’s MTF book rise shows growing investor preference for regulated leverage through the cash market. “As activity in derivatives has moderated due to higher trading costs and regulatory changes, MTF has emerged as an attractive alternative for investors seeking leveraged exposure,” he said.Further, the wider availability of MTF on digital platforms has supported adoption. He said the RBI’s revised funding norms for capital market intermediaries are aimed at funding structures and proprietary trading rather than retail participation. “The continued growth of the MTF book is being driven by strong investor demand, increasing awareness of the product, and its growing importance in supporting cash market participation, Shah said.The long-term growth outlook for MTF remains intact due to rising investor adoption and its growing importance in brokers’ business models. CareEdge said that renewed geopolitical tensions could weigh on near-term activity and that the RBI’s revised framework, effective July, may influence market liquidity as brokers adjust to higher working-capital requirements.Published on July 26, 2026
