Shares of Groww declined sharply by more than 3% in early morning trade after the Union Budget 2026 confirmed a significant increase in Securities Transaction Tax (STT) on derivatives trading. The move unsettled market participants, triggering concerns over the outlook for brokerages and exchanges that rely heavily on futures and options volumes.
The sell-off followed the government’s decision, announced in the Union Budget 2026, to raise STT on futures contracts from 0.02% to 0.05%, more than doubling transaction costs for futures traders. In addition, STT on options premium and options exercise has been increased to 0.15%. These revised rates are scheduled to come into effect from April 2026.
The increase in STT has raised apprehensions across the market because derivatives trading forms a major revenue stream for stockbrokers and exchanges. Higher transaction costs are widely expected to weigh on trading activity in futures and options, particularly among high-frequency and cost-sensitive participants. Any sustained slowdown in derivatives volumes could directly impact revenue visibility for platforms such as Groww, which have seen strong user engagement in the F&O segment in recent years.
