Market swings trigger retail rethink, active client base of top brokers falls

A majority of India’s top brokerages saw a decline in active clients — defined as users transacting at least once a year — in FY26, signalling a slowdown in retail trading activity amid a year of sharp swings for markets.

Six of the top 10 brokers posted a year-on-year decline in active client base for the financial year ended March 31, data from NSE showed.

In percentage terms, Upstox saw the steepest decline in active clients at 27.64%, followed by Zerodha at 12.62% and Motilal Oswal Financial Services at 11.14%, according to exchange data. Angel One’s client base fell 10.75%, while HDFC Securities and Kotak Securities posted declines of 8.75% and 6.82%, respectively.

The total number of active clients on NSE declined to 4.57 crore at the end of FY26, compared with 4.92 crore a year earlier.

Broking officials said the drop reflects a combination of market volatility, regulatory tightening and a shift in investor behaviour.

“Higher volatility compounded by geopolitical uncertainty, tighter regulations in the derivatives segment, and a selective investor mindset have all reduced trading activity, especially among new participants,” said Krishna Rao, MD & Co-head — Equity Broking Group, JM Financial Services.Segment-wise, the cash market had 3.58 crore active clients, while the futures and options segment had about 85 lakh. The combined active client base across segments stood at 3.79 crore.

Ashish Rathi, head — Retail Business at HDFC Securities, said volatility driven by tariffs and geopolitical tensions kept returns muted and slowed new client additions.

“A large portion of retail investors have also been focused on mid and small caps, which haven’t performed well over the past year, due to which many are sitting on losses and are less active in the market,” he said.

For the year ended March 31, the Nifty fell 5%, while the Sensex declined 7% from a year earlier. The Nifty Smallcap 250 and Nifty Microcap 250 dropped 5.4% and 8.7%, respectively, while the Nifty Midcap 150 rose 1.6%.

“Retail clients are becoming more mindful about risk, costs and market conditions, and this could be healthy for overall market quality going forward,” said Rao. “I feel the key challenge now is not adding new accounts, but converting passive account holders into consistently engaged investors.”

Market leader Groww, along with ICICI Securities, SBICAP Securities and Dhan, saw an increase in active clients during the period.
In terms of rankings, ICICI Securities overtook Upstox to become the fourth-largest broker by active clients, while SBICAP Securities and Dhan moved ahead of Motilal Oswal Financial Services.