Existence corridors have seen their squeezed margins in the quarter of March, with reduced commercial volumes and income falling, by a series of regulatory changes, as greater margin requirements, the elimination of basic refunds linked to Demat.
Around the last months, the Bag Board and Exchange of India (Sebi) introduced six measures aimed at adjusting the futures and options market (F&P), the impact of what is now being completely scared. A combination of these steps and volatile global signals have reduced the volumes of the cash market and derived by approximately 30%, market experts said.
The impact is visible on the gains of the quarter of March, with an Angel One discount corridor that informs a 48 percent year -on -year drop in net earnings to ₹ 174.5 million rupees, along with a 22 percent drop in revenues to ₹ 1,056 million rupees. HDFC Securities also saw that its income decreased by almost 14 percent to ₹ 742 million rupees and net earnings for 21 percent to ₹ 251 million rupees from the previous year.
“The performance of the broker has been abolished due to a fall in the volumes of the cash market and the rules of F& or Sebi,” said Sadsp Chordia, director of operations of Kotak Securities. “The average daily volumes of the cash markets have decreased almost 30 percent of the levels observed before September 2024, largely following the global signals. Meanwhile, the derivative segment has seen a substantial fall in the number of negotiated contracts due.
Demat limits
Another blow to the revenues of the runners occurred with the Mo -Manza of Sebi in September 2024 to raise the investment limit for basic demat accounts five times, from ₹ 2 Lakh to ₹ 10 Lakh, prevention corridors to collect normal maintenance rates.
“The improvement of the Demat account limit of Basic Services (BSDA) has abolished at least 30-35 percent of the revenues of demat charges, especially annual maintenance charges,” said Ashish Rathi, full-time director of HDFC Securities. “In addition to the fall in derivative volumes, regulatory changes such as demat accounts and Demat accounts of the royal label have the margins of the equally pressured runners,” he said.
No more refunds
In addition to the pressure, Sebi demanded a uniform rates structure for the October 2024 runners, discarding the previous incentives linked to volume. This movement hit zero brokerage players particularly hard, forcing them to modify their rates structures to cushion the impact.
“The rules of the faithful label have affected zero brokerage houses at at least 10-15 percent, since the main benefit was previously obtaining discounts by bringing large commercial volumes,” said an official of a discount brokerage company. “This incentive had driven the rise in the discount brokerage, especially after the retail investor increases after the COVID.”
Groww, one of the largest discount runners, checked its brokerage rate to 0.1 percent or ₹ 20 per order, while it is lower, from the previous one 0.05 percent. Angel One also updated its price to a plane from ₹ 20 or 0.1 percent per order executed.
To compensate for margin pressures, discount corridors now begin to expand products such as margin trade (MTF) facilities, which allow up to 5X leverage in cash market operations. They can also consider crossed sale, distribution models and diversify their income flows, Rathi said.
Posted on April 27, 2025
