In today’s markets, the drama was hard to miss — from stocks tumbling to regulatory announcements making headlines. Shares of BSE Ltd, Angel One, and Motilal Oswal Financial Services fell nearly 7%, after SEBI Chairperson hinted at extending the tenure of equity derivative contracts — a move that could impact F&O trading volumes and revenues for major players. At the same time, SEBI cracked down on finfluencers and floated the idea of a regulated platform for pre-IPO trading, signaling a stronger push toward making investing safer and more structured.
Meanwhile, IDBI Bank saw its stock slide over 2% after updates on the government and LIC’s proposed stake sale, a move aimed at improving management efficiency and reducing the fiscal burden.
SEBI’s Push to Rein in Speculation
India’s Futures & Options (F&O) market has seen explosive growth, now dominating capital markets. To put this in perspective:
- On NSE, the share of options trading has jumped from 72% to 99% in the past decade.
- Retail participation is at record highs, with demat accounts quadrupling to 192 million by March 2025.
- Discount brokers, product innovations like weekly options, and financialization of household savings have fueled this boom.
But here’s the flip side — reports show 90%+ retail traders lose money in F&O. To curb excessive speculation, SEBI is considering extending derivatives contract tenure, making it harder for short-term speculative traders to dominate the market.
Recent measures already in place include:
- Limiting weekly expiries to one benchmark index.
- Doubling or tripling lot sizes to raise entry barriers for small traders.
- Shifting expiry days to avoid overlaps.
- Tightening intraday risk checks and margin requirements.
The goal is clear: derivatives should return to their true purpose — hedging and risk management, not reckless speculation.
Impact on Major Market Players
Angel One
With ~45% of its Q1FY26 gross income coming from F&O, Angel One is directly exposed to SEBI’s reforms. Higher margins and larger lot sizes may reduce retail trading frequency, impacting revenue growth. However, diversification into mutual funds, insurance, and wealth products provides some cushion.
BSE Ltd
BSE re-entered the derivatives segment in 2023 and rapidly captured nearly 19% share by Q4FY25. Derivatives have been driving its profitability, but stricter SEBI rules — especially restrictions on weekly expiries — could slow its momentum. The long-term challenge will be attracting and retaining traders under a more regulated setup.
Motilal Oswal Financial Services (MOFSL)
MOFSL has ~8% market share in derivatives premium turnover. Like others, it faces potential volume decline. However, its diversified model — spanning wealth management, asset management, and investment banking — makes it better positioned to absorb the impact.
SEBI vs Finfluencers & Pre-IPO Trading
SEBI is also cracking down on finfluencers — with raids at Avadhut Sathe’s Karjat Academy highlighting its vigilance. During the pandemic, finfluencers rose in popularity, often pushing aggressive F&O strategies. With most retail traders losing in derivatives, SEBI’s move aims to protect investors from unsolicited and misleading advice.
Another landmark development: SEBI is considering a regulated pre-IPO trading platform. Currently, unlisted shares trade in opaque, unregulated markets. A monitored exchange-like system would bring transparency, fairness, and investor protection.
IDBI Bank: Privatization in Motion
On the banking front, IDBI Bank’s shares slipped 2%+ after DIPAM Secretary confirmed that qualified bidders are completing due diligence for its strategic stake sale.
Key details:
- The government and LIC together hold 94%+ equity, planning to offload 60.72% combined stake (30.48% by Govt, 30.24% by LIC).
- The deal includes transfer of management control.
- Privatization is part of the ₹47,000 crore FY26 divestment target, aimed at reducing fiscal pressure and boosting efficiency.
Despite short-term stock weakness, IDBI Bank’s fundamentals are improving:
- Net Profit up 17% YoY to ₹2,007 crore.
- Gross NPA down to 2.93% and Net NPA at just 0.21%.
- ROA at 2.01%, supported by a healthy CASA ratio of 44.65%.
Privatization could bring in new promoters, global best practices, and stronger asset quality, unlocking long-term value for investors.
Final Take
SEBI’s actions highlight a regulatory shift toward stability, transparency, and investor protection. While brokers and exchanges heavily reliant on F&O may face near-term headwinds, the market overall could benefit from a safer and more balanced ecosystem.
For investors, the message is clear: the era of high-leverage, low-cost F&O speculation may be fading. The future belongs to structured investing, delivery-based trades, and trusted financial advice.
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Yash Vora is a financial writer with the Informed InvestoRR team at Equentis. He has followed the stock markets right from his early college days. So, Yash has a keen eye for the big market movers. His clear and crisp writeups offer sharp insights on market moving stocks, fund flows, economic data and IPOs. When not looking at stocks, Yash loves a game of table tennis or chess.
