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Stock Brokers Pivot from Trades to Loans as PhillipCapital Highlights Margin Trading Surge
M
Moneycontrol•07-10-2026, 13:18
Stock Brokers Pivot from Trades to Loans as PhillipCapital Highlights Margin Trading Surge
- •PhillipCapital reports that lending to traders via Margin Trading Facility will drive the next phase of earnings for stock brokers as per-order brokerage fees decline.
- •The industry margin trading book has grown sixfold since FY23 to reach Rs 1.52 lakh crore, becoming a structural answer to shrinking core transaction revenues.
- •Regulatory curbs on derivatives and float income are pushing brokers to shift from a transaction-fee model to a recurring-revenue platform model.
- •PhillipCapital initiated coverage on the Indian broking industry, rating both Angel One and Groww's parent Billionbrains Garage Ventures as a buy.
- •Funding risks and debt reliance are highlighted as key credit considerations, especially as firms like Angel One significantly increase borrowings to fund client trading.
Key Questions Answered
Brokerage per order has fallen significantly from Rs 20-25 in FY10 to Rs 3-5 in FY26, while regulations have curbed derivatives and float income. As a result, brokers are turning to margin trading facilities and lending to drive their next phase of earnings.
Under the margin trading facility, clients pay part of the share price while brokers fund the rest at interest. The industry's margin trading book has grown sixfold since FY23, reaching Rs 1.52 lakh crore.
PhillipCapital initiated coverage on the Indian broking industry by giving a 'buy' rating to both Angel One and Groww's parent company, Billionbrains Garage Ventures. The brokerage set a target of Rs 388 for Angel One and Rs 245 for Groww's parent entity.
