Indian investors have borrowed a record ₹1.49 trillion through margin trading facilities as of mid-September. While this shift helps brokerages earn steady interest income during slower trading periods, it also exposes investors to higher risks if the equity market faces a sharp correction.
The margin trading facility (MTF) book in India has climbed to a record ₹1.49 trillion as of September 15. This represents a significant jump from approximately ₹99,000 crore recorded a year earlier. This service allows investors to buy more shares than their cash balance would normally permit, with the brokerage providing the remaining funds as a loan.
For brokerage firms, this growth has become a vital revenue stream. As cash market activity—where investors trade using their own money—remains below the levels seen in the June quarter, brokers are relying more on the interest earned from these margin loans. This shift helps cushion their earnings when transaction volumes and commission fees are low.
Several major brokerages have seen their margin books expand rapidly. Angel One’s average MTF book for the September quarter stood at roughly ₹6,600 crore, reflecting a 20% growth compared to the previous quarter. Similarly, Groww saw its margin book rise by about 23% to ₹4,130 crore. Zerodha, another major player, reported its MTF book at approximately ₹9,265 crore as of August 2026, noting that this segment now contributes about 10% to its total revenue.
While the growth in margin funding provides stability for brokers, it introduces a different set of risks for investors. Margin trading effectively uses leverage, which can amplify both gains and losses. Since the Nifty and Sensex indices have been trading below their start-of-year levels, the market has not provided a strong upward trend. If the market faces a sharp downward move, investors with borrowed money may face margin calls. A margin call forces the investor to either add more money to their account or sell their shares immediately to repay the loan, often leading to losses.
Because this model relies on credit, investors should track how brokerage firms manage their credit quality. As the total amount of debt in the system reaches record highs, the ability of brokers to recover these loans during market volatility becomes a key factor in the long-term health of these businesses. For now, the reliance on margin interest suggests that brokerages are actively trying to diversify their income beyond simple transaction fees to manage weaker market volume trends.