Margin Funding Book Of Brokers Reaches All-Time High In May Due To Strong Retail Contribution

The MTF of the brokerage industry in India was recorded at an all-time high during May 2026 owing to the rising number of retail clients investing in leverage equity positions.

Industry data showed the outstanding MTF book expanded 65% year-on-year to approximately ₹1.15 lakh crore in May, compared with around ₹69,700 crore in the corresponding period last year. On a sequential basis, the book also recorded healthy growth, indicating sustained demand for margin-backed stock purchases.

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In MTF, investors can purchase shares by investing a part of the total transaction value, while the balance is paid for by brokers using eligible securities. This method has caught the attention of retail investors due to the increased trade volumes and cash market involvement.

Retail Investors Responsible for Increase

The rise in exposure to margin funds has been accompanied by an increase in demat accounts and greater participation in the equity market. Retail investors have increasingly utilized MTFs in order to take greater positions on shares through relatively lesser amounts of initial investments.

Moreover, the availability of MTF facilities from brokerages over the last few years has improved considerably. In fact, an increasing number of stocks now qualify for MTF, while the financing rates are also competitive.

Market participants have generally preferred large-cap stocks and liquid stocks under the facility due to lower risk of sharp price fluctuations and better collateral quality.

Concentration Among Leading Brokers

A significant portion of the industry’s margin funding book remains concentrated among large brokerage firms, which continue to account for the majority of MTF exposure.

An increase in book funding has been paralleled by an increase in turnover in the cash markets and constant investor participation. Brokers have received more interest from margin funding transactions, which is in addition to regular income from brokering activities.

On the other hand, there are regulations that stipulate the need for the brokers to ensure that they have enough coverage of their clients’ investments.

Market Volatility Remains A Key Factor

Although the use of MTFs has gone up quite a bit, the facility is still susceptible to changes in the markets. Any sharp moves down in stocks will result in margin calls, making it necessary for traders to post money or unwind their positions.

Despite there being uncertainties associated with geopolitical situations around the world and changes in the commodity markets in the month of May, the book on MTFs has gone up quite significantly.

The record high margin funding exposure and retail interest in MTFs is reflective of its importance in retail trading.