New Delhi, Feb 1 (PTI) Shares of brokerage-related companies tumbled nearly 12 per cent on Sunday after Finance Minister Nirmala Sitharaman proposed an increase in the Securities Transaction Tax (STT) on derivatives.
In her Budget speech for 2026-27, Sitharaman said the STT on futures contracts would be raised to 0.05 per cent from 0.02 per cent, a move aimed at curbing excessive speculation in the futures and options (F&O) segment.
On the BSE, shares of Multi Commodity Exchange tanked 11.60 per cent to close at Rs 2,232.15 apiece, while Angel One plunged 8.61 per cent to settle at Rs 2,320, and IIFL Capital Services declined 8.06 per cent to finish at Rs 303.80.
In addition, the stock of Billionbrains Garage Ventures, the parent company of Groww, fell 5.11 per cent to end at Rs 168 and Anand Rathi Share And Stock Brokers went lower by 2.03 per cent to settle at Rs 567 on the bourse.
On the NSE, shares of BSE Ltd ended 8.12 per cent lower at Rs 2,570 per piece.
Meanwhile, the 30-share BSE Sensex plummeted 1,546.84 points or 1.88 per cent, at 80,722.94, while the NSE Nifty dived 495.20 points, or 1.96 per cent, to end at 24,825.45.
Addressing a post-budget conference here, FM Sitharaman said the Government is not against derivative trade, but wants small investors, who are facing huge losses, to stay away from the speculative F&O market.
"This nominal increase is purely aimed at speculation, only to deter them, to discourage them. We are not against it(F&O trade), but small investors are facing losses so how can we be quiet, so it (STT hike on F&O) is to deter such investments," Sitharaman said.
According to studies by Sebi, over 90 per cent of retail investors' trades in the F&O segment lead to losses, and the capital markets regulator has also taken steps to reduce volumes in the past.
Capital market regulator Sebi has also cautioned small and retail investors against trading in F&O segment underscoring the need for responsible investing.
"The proposed taxation on F&O is expected to raise transaction costs across the derivatives market, affecting individual investors as well as institutional participants such as AMCs, corporate hedgers, and portfolio managers who rely on these instruments for hedging and risk management," Ashish Singhal, Co-founder, Lemonn, a new-age stock trading and investment platform, said.
He noted that the current STT framework does not differentiate between various categories of users or the purpose of derivative usage, genuine hedging activity is subject to the same higher costs as speculative trading.
"This uniform treatment could discourage some investors from employing prudent hedging strategies, effectively increasing their exposure to market risk and making portfolio protection more expensive," Singhal said.
He further explained, "For every Rs 1 lakh worth of futures sold, traders now pay Rs 20 in STT instead of the previous Rs 12.50, and for a Rs 10,000 option contract sale, STT increased to Rs 10 from Rs 6.25".
"The intent is to curb excessive speculation, the lack of distinction between risk-management-driven participation and speculative activity remains a key policy consideration".
Amit Majumdar, Group Chief Strategy Officer, Angel One Ltd, said, "We have transformed Angel One into a diversified franchise spanning wealth, credit, asset management and soon insurance, adding steady, diversified revenue streams".
"In Q3 FY26, F&O brokerage contributed about 44 per cent of our gross revenue, while interest income from client funding and our broader platform accounted for around 33 per cent, with the rest coming from cash and commodity broking, depository, distribution, and other income streams.
"This diversified mix reinforces the resilience of our model and gives us confidence that the broader trajectory of our business remains firmly intact," Majumdar added.
Brokerage stocks slumps nearly 12 pc as STT hike dampen investor sentiment
PTI
Updated: February 01, 2026 17:32 IST
(This story has not been edited by THE WEEK and is auto-generated from PTI)
