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Investors borrow ₹1 lakh crore for margin trading
Indian investors are turning to margin trading like never before, borrowing close to ₹1 lakh crore from brokers to buy stocks—up massively from just ₹7,500 crore at the end of 2020.
While this Margin Trading Facility (MTF) can boost gains, it also means paying steep interest rates (9%-15%) and taking on extra risk if trades don't work out.
Reliance, Tata Motors among most popular MTF stocks
Popular stocks like Reliance Industries and Tata Motors see the most MTF action.
HDFC Securities's Ashish Rathi says, "we don't see any risk to the system," but SEBI is reviewing rules to address potential systemic risks.
If stock prices drop or collateral runs low, brokers may quickly sell off shares, which can make prices fall even faster and add to market volatility.