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Informist, Tuesday, Jun. 23, 2026

 

By Rajesh Gajra

 

MUMBAI – The sequential growth in the average book size of the margin trading facility in the equity cash market on the stock exchanges rebounded in May after six consecutive months of very weak growth and even a fall in March, according to an estimate by CARE Ratings. The daily average margin trading facility book value was at an all-time high of INR 1.27 trillion in May, up 11% from a month earlier, compared with a 1.6% sequential growth in April, the rating agency said in a report.

 

Investor participation in the margin trading facility, which is used to take leveraged cash market positions, recovered in May amid improved market sentiment and expectations of stabilisation in the West Asia crisis, the ratings agency said. The average daily margin trading facility book rose steadily month on month, reaching INR 1.12 trillion in October 2025 from INR 770 billion in May 2025, the data showed. But over the following six months, the book size remained within a narrow range between INR 1.12 trillion and INR 1.20 trillion, according to the data.

 

Last week, the National Stock Exchange said in its latest monthly publication that the average daily value of the margin trading facility in its equity cash segment was INR 1.15 trillion in Apr-May. The average daily margin trading book was INR 960 billion in 2025-26 (Apr-Mar), according to the NSE.

 

CARE Ratings collated its margin trading book value data from both the NSE and the BSE. "NSE continues to 

dominate the MTF (margin trading facility) segment, contributing over 96% of total MTF volumes... (while) BSE's MTF book remained relatively small in comparison," the rating agency said in its report. As per CARE Ratings, NSE's average daily margin trading facility book value was INR 1.22 trillion in May, while on the BSE, it was only INR 50 billion.

 

The rating agency has computed the average margin trading book value in a month using data from all Tuesdays and the last working day of the month.

 

The recovery in growth of the margin trading facility book in May was despite a flat average daily equity derivatives turnover on the exchanges, according to the rating agency's report. The equity derivatives turnover was stagnant "primarily due to higher securities transaction tax rates on derivatives trading, which raised overall trading costs," CARE Ratings said. Further, the easing of the West Asia situation in May helped improve market sentiments and reduce "the need for aggressive hedging and speculative positioning, which typically lowers derivatives churn," it said.

 

Going forward, the improvement in market sentiments will support the margin trading book growth, but the implementation of Reserve Bank of India's amendments to capital market exposures of banks and non-banking finance companies, deferred to July from April, "could affect trading volumes and overall market activity once the revised framework takes effect," CARE Ratings said.  End

 

Edited by Saji George Titus

 

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