India's brokerages face a sharp 30% revenue hit as West Asia war spooks retail investors and clients exit

India’s retail brokers are bracing for a sharp erosion in active clients and revenue as the escalating West Asia war threatens to further dampen market sentiment and trading activity.The active retail client base of brokerages has already shrunk over the past year due to muted, rangebound markets and the impact of regulatory curbs on derivatives trading. The outflow of active clients is set to intensify from March as the US-Iran war increases the risk of more retail investors stepping away from the stock market.“Broker revenues are down 20-30% across the industry year on year.

Recovery will depend on net client additions—how many customers are acquired relative to those becoming inactive. If acquisition does not outpace attrition, revenue pressures will persist,” said Sandeep Chordia, chief operating officer at Kotak Securities.He added that with the markets subdued over the past year, the recent decline is likely to worsen the trend.

Kotak estimates a 10-15% hit on broker revenue if the war continues beyond April.“Near-term active client numbers could see further pressure. If this continues, the industry risks a ‘leaky bucket’ dynamic, where existing clients exit faster than new ones are onboarded,” Chordia said.The slowdown in retail investor participation started even before the latest geopolitical shock.

Total active clients across brokers declined about 8% to 44.81 million as of February in FY26 from levels in FY25, marking a reversal after years of rapid expansion driven by retail inflows, according to National Stock Exchange data. Active clients are investors who have traded at least once on the exchange in the past 12 months.To be sure, dematerialized accounts—digital, paperless accounts required for trading in