THE REALITY OF INDIAN TRADING BOOM: PLATFORMS GAIN, RETAIL INVESTORS BLEED

Poor financial literacy and a lack of minimal safeguards have left millions of investors at risk

- JAYATU SEN CHAUDHURY & AKHTER M. RATHER

India's retail trading revolution has delivered uneven results. While new-age brokerages are raking in record profits, millions of individual investors—especially in derivatives—are nursing heavy losses.

The paradox at the heart of India's stock market boom is this: Technology has made trading more accessible, but not necessarily more profitable for the average investor. In four years, the number of demat accounts has jumped from 40 million to 150 million. Most new investors are under 35, digitally savvy, and using apps like Zerodha, GROWW, and Upstox. Yet even as equity market participation surged, more so in high-risk options trading, outcomes are dismal for most newcomers.

A new generation of brokers

A dramatic shift in the brokerage landscape set the stage for a trading surge. Legacy firms like Motilal Oswal and ICICI Direct were slow to adapt to the mobile-first generation. In contrast, discount brokers embraced app-based platforms early, slashed fees, and streamlined user experience. By 2024, they accounted for 36% of industry revenue and 44% of profits—underscoring how low-cost, high-volume model outperformed traditional players.

Technology meets aspiration