The Margin Trading Facility (MTF) book has reached a new all-time high of ₹1.33 trillion in June 2026, marking the third consecutive month of growth after surpassing the previous record of ₹1.27 lakh crore set in May 2026. According to Business Standard, the MTF book recorded a 5.9% month-on-month jump as of June 24, following growth rates of 9.7% in April and 8.8% in May. This sustained expansion comes despite the facility witnessing its first decline in February 2026 after growing for 10 months, and a softening to ₹1.05 trillion in March amid market volatility. The MTF book has maintained levels above ₹1 trillion since October 2025, indicating a structural shift in investor behavior toward leveraged trading.
The latest surge in MTF activity is being supported by improved investor sentiment following the easing of geopolitical tensions in West Asia and declining oil prices. As reported by Business Standard, benchmark indices have gained significantly in June, with Sensex up 3.1% and Nifty rising 2.1% as of June 24. This recovery comes after the market turmoil experienced in May, when overall average daily turnover (ADTO) across futures & options (F&O) and equities remained stagnant at ₹1.52 lakh crore. The improvement in cash market sentiment, combined with higher investor participation and MTF activity, has contributed to the sustained growth in leverage facilities despite challenging market conditions earlier in the year.
Nearly 50% of the entire industry's MTF book comprises non-F&O stocks, creating a structural vulnerability that experts warn could pose significant risks to the ecosystem. As explained by PMS fund manager Devina Mehra of First Global, MTF effectively acts as a double-edged sword where investors can put up ₹25 and buy stocks worth ₹100 using leverage, with the ₹75 being effectively a loan that enhances both profits and losses. This leverage mechanism creates an illiquidity trap where if mid- or small-cap stocks fall sharply, lenders make margin calls requiring borrowers to top up funds, potentially forcing systematic liquidation of pledged collateral. However, industry experts note that the exposure is highly granular and well-diversified across a large number of stocks, with hardly any single-stock position exceeding approximately ₹2,200 crore, which significantly mitigates concentration risk.
Zerodha CEO Nithin Kamath highlighted the anomaly by noting that MTF books are growing across brokers despite broader markets going nowhere, while warning of systemic dangers. According to Kamath, while Zerodha's MTF book remains capped at roughly 25% of their net worth, other brokerages across the street are flirting with 500% exposure threshold - the maximum permitted by regulators. The National Stock Exchange continues to dominate the MTF segment with a 96% market share, holding an average book of ₹1.22 lakh crore, while BSE registered a sharp 58.3% year-on-year uptick to ₹0.05 lakh crore. Roop Bhootra from Anand Rathi Share and Stock Brokers emphasized that the MTF growth is expected to sustain in the near term, supported by improved market confidence and gradual improvement in investor sentiment.
A major regulatory hurdle looms as the Reserve Bank of India's revised regulatory amendments, deferred from April 2026, are now scheduled to take effect in July 2026. According to CareEdge data, the implementation of these regulatory changes could significantly alter overall market liquidity, impact trading volumes, and test the endurance of bulls holding record-high leveraged positions. The relentless expansion of the MTF book despite choppy equity benchmarks has raised major red flags regarding the sustainability of this bull run, with experts warning of potential systemic risks if market conditions reverse. However, the report adds that with the easing of geopolitical tensions and gradual improvement in investor sentiment, capital market activity is expected to remain supportive going forward, potentially driving further MTF growth.
