MTF Book Surges 65% to Rs 1.27 Lakh Crore as Retail Investors Amplify Leveraged Bets in Equity Market

MTF Book Surges 65% to Rs 1.27 Lakh Crore as Retail Investors Amplify Leveraged Bets in Equity Market​

India’s margin trading facility (MTF) book registered a powerful surge in May 2026, climbing 65% year-on-year to reach Rs 1.27 lakh crore. This dramatic growth reflects a sustained appetite among retail investors for leveraged equity positions and increased participation in the market, according to a CareEdge report.

The MTF segment also showed strong sequential improvement, rising by 11% in May compared to the modest 1.6% growth recorded in April. This rebound signals improving overall market sentiment after a 6% decline noted during March, aligning with expectations of stabilized West Asia conflict and robust activity in the cash segment.

Dominance of NSE Underpins MTF Growth​

The National Stock Exchange (NSE) significantly dominates the margin trading landscape, contributing over 96% of total MTF volumes. The average MTF book on NSE rose to Rs 1.22 lakh crore in May, marking a substantial 66% increase from one year ago.

While BSE holds a much smaller share of market volume, it also posted strong growth. BSE’s MTF book increased by 58% year-on-year, reaching approximately Rs 5,000 crore. This data suggests robust activity is highly concentrated within the country's largest exchanges.

Cash Market Strength and Derivatives Headwinds​

The rise in margin funding coincided with a notable strengthening of the cash market. The Average Daily Turnover (ADTO) in the cash segment grew by 28% year-on-year, reaching Rs 1.5 lakh crore. This growth was supported by higher investor participation and increased utilization of margin facilities, contributing an additional Rs 12,000 crore sequentially.

However, derivatives activity faced headwinds on a monthly basis. Overall combined average daily turnover across futures and options (F&O) and equities stood at Rs 487 lakh crore in May, which is a 40 increase from the previous year. Yet, on a month-on-month scale, overall turnover remained largely flat, increasing by only Rs 20,000 crore.

Regulatory Costs and Global Concerns Dampen Derivatives Churn​

CareEdge attributed the muted sequential growth in derivatives to several factors including heightened market volatility, persistent global macroeconomic concerns, and higher securities transaction tax (STT) rates on derivatives trading.

The report further noted that expectations of easing tensions in West Asia played a role, reducing the immediate necessity for aggressive hedging and speculative positioning, which typically limits derivatives churn. This suggests cost-related and sentiment factors are currently tempering sharp growth in F&O activity.

Exchange Specifics Detail Derivatives Flow Normalization​

Derivatives trading flows showed specific trends across both exchanges. BSE’s F&O turnover saw a 19% sequential fall in May, as its trading normalized following an exceptionally strong April and liquidity shifted back to NSE after holiday-related distortions the previous month.

Conversely, NSE recorded a 12% sequential increase in derivatives turnover, indicating a return of activity to the country’s leading exchange. The data collectively suggests that while regulatory costs and market uncertainties present challenges for derivatives growth, retail investors are strongly bolstering the cash market through margin funding exposure.