Margin Trading Funding (MTF) usage by retail investors hit an all-time high of ₹96,000 crore, surpassing even the peak bull market levels of September 2024 (₹85,400 crore). This is coming despite relatively flat index performance.
Why is MTF gaining so much traction?
- SEBI’s tightening of F&O regulations (increased margins, STT, etc.) may have nudged many retail investors toward MTF as an alternative leveraged instrument.
- MTF is easier to understand than futures/options. For many new traders, it’s a simpler concept: buy stocks with partial capital and pay interest.
- Demat account surge: Over 20 crore demat accounts now, with a significant portion under age 30. Many of these investors are more comfortable with app-based, collateral-backed exposure.
Key Stats (as per ET report):
| Period | MTF Book Size (₹ Cr) |
|---|---|
| Sep 2024 | 85,400 |
| Mar 2025 | 71,000 |
| Jun 2025 | 88,000 |
| Aug 2025 | 96,000 |
Top stocks with highest MTF exposure:
- HAL – ₹1,373 Cr
- Tata Motors – ₹1,337 Cr
- TCS – ₹1,250 Cr
- Reliance & Jio Financial – ₹1,000+ Cr each
Something to Note:
- Interest rates on MTF are typically high 9–15% p.a.
- Leverage : A 5–10% correction in your funded stocks can wipe out a large portion of your capital.
- Not the same as delivery investing: Retail might assume it’s like a cash market position, but the risk profile is different. Since everyday interests are charged
- Forced selling risk: If the value of pledged securities drops, brokers can liquidate without warning.
Retail investors are adapting to the new norm when one door closes (F&O restrictions), another opens (MTF). But just like with derivatives, education and position sizing remain key.
Using leverage isn’t wrong but blind leverage without a plan can be disastrous. Especially in an environment where markets are choppy and valuations remain elevated.
I have a question here,
- Anyone who used MTF, how do you manage risk? like what are factors you consider?
- Do you think SEBI will eventually regulate MTF more closely like it did with F&O?
Would love to hear your experience and thoughts.