Discount brokers board margin funding biz with revenue channels under lens
Discount brokers are increasingly getting into margin trade funding as they look to diversify revenue channels at a time when their core revenue-generating business of futures and options trading has come under regulatory scrutiny.
Margin trade funding (MTF) – where brokers lend money to traders to buy more shares and earn interest income while keeping the financed shares as collateral – is dominated by bank-backed stockbrokers such as ICICI Securities and Kotak Securities.
Bengaluru-based Zerodha, the country’s second largest stockbroker, is working to launch the product soon while rival Groww has recently gone live with this feature. Fyers is working on the beta testing stage but wants to grow this book “very carefully” even as early movers Mstock, Angel One and 5Paisa are generating significant revenue by growing their MTF books.
Early movers
Mirae Asset-backed Mstock has already built a loan book of around Rs 2,000 crore on MTF and has a target to double this book in the next one year.
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