Shares of Angel One and Groww fell more than 8% in early trade after the Reserve Bank of India released draft guidelines that could moderate trading activity in capital markets, particularly in the derivatives segment. As of 9:30 AM Angel One shares were trading 5.07% down at Rs 2,561.40 and Groww shares were trading 3.70% down at Rs 166.53.
Why Are Brokerage Stocks Under Pressure?
The RBI’s draft guidelines are seen as tightening norms around capital market activities. Market participants believe the measures could affect proprietary (prop) trading, which contributes significantly to overall derivatives volumes.
According to market data, nearly 35% of BSE’s total trading volumes are driven by proprietary activity. A slowdown in this segment could directly impact exchange transaction revenues.
Dhiraj Relli, MD & CEO of HDFC Securities, told CNBC-TV18 that futures and options (F&O) volumes could decline by 15–20% from April 1 if the proposed norms are implemented. He also noted that proprietary activity accounts for nearly 40% of F&O volumes, indicating the scale of exposure.
Impact on Angel One and Groww
Brokerage firms such as Angel One and Groww derive a substantial portion of their revenues from transaction-based income, especially from derivatives trading. Any moderation in F&O volumes can directly affect brokerage income, clearing fees and related earnings.
Global brokerage Citi said the draft guidelines could lead to moderation in overall trading activity in select cohorts, particularly proprietary trading. However, it added that it is premature to assess the overall profit and loss impact at this stage.