A steep decline in user base and revenues has left India’s premier investment tech platforms and discount brokers like Zerodha, Groww, Angel One rattled with the national markets regulator tightening its noose around the high-volume and high-risk F&O trading activities.

India’s broking industry has thrived for years on a model built on zero-cost or deeply discounted equity delivery trading, and fees charged from high-turnover, low-cost derivative volumes. Retail investors, encouraged by mobile-first platforms and low entry barriers, flocked to weekly options and expiry-day strategies that set transaction volumes and revenues zooming.

The NSE and BSE together made up more than 80% of the global F&O turnover in April 2025.

But, ever since the Securities and Exchange Board of India cracked the whip and thrashed out rules ranging from true-to-label transparency guidelines to expiry-day restrictions and stricter compliance demands, the economics of F&O trading has structurally altered to the extent that the investment tech platforms are now taking a relook at their business models.

The overall F&O trading volumes reportedly fell by 29% in notional terms in FY25 from a year ago. SEBI, however, in a report earlier this year mentioned that trading volumes remained higher by 14% and 42% in premium and notional terms compared to two years back.

Inc42 observed the evolving dynamics at the investment tech space and focussed on some of the biggest entities in the market to comprehend how the SEBI rules have affected their businesses.

Zerodha: When Topline Comes Crashing Down

Zerodha alone constitutes 18-20% of the average daily turnover (ADTO) for retail F&O on the National Stock Exchange (NSE). The revenue eroded at least 40% in the first quarter of FY26, according to a statement from the chief executive Nithin Kamath.

He said in a blog post that the impact of regulations started telling upon the company’s financial performance from last October with the topline crashing from INR 10,000 Cr to INR 8,500 Cr between FY24 and FY25.

“This risk has now crystallised with the increase in Securities Transaction........

© Inc42