India's Margin Trading Facility Soars to ₹1.16 Lakh Crore: PPFAS Warns of Broker Risks

• India's Margin Trading Facility (MTF) book surged to ₹1.16 lakh crore by December 2025, a significant jump from ₹24,920 crore in FY23.
• MTF allows investors to buy equities with a fraction of the value, with brokers funding the rest at 9-16% interest.
• The MTF market is concentrated, with large bank-backed brokers holding 50% share; smaller independent brokers face higher credit and liquidity risks.
• Brokers fund positions via own capital, NBFC borrowings, or commercial papers, while banks face regulatory restrictions on margin funding.
• PPFAS's Parag Parikh Liquid Fund limits exposure to bank-backed broking companies to 5% of its portfolio, citing diversified income streams and parent bank support as risk mitigators.