Angel One's Second Act

As derivatives trading slows down under tighter regulations, the broker's strategy to evolve into a broader financial platform will be put to test

- • Yuthika Bhargava

For years Alok Gupta, a 56-year-old IT professional, has been investing in equities. After the pandemic he moved into derivatives lured by the carrot of high returns.

“I started trading in F&O [futures and options] about three years back. It is like an addiction. Initially, I made around ₹7-8 lakh, so I increased my investments to nearly ₹20-25 lakh. But after that, I lost a significant amount,” says Gupta.

Gupta is not alone. Lakhs of retail investors, many of them first-timers, have burnt their fingers trading in the high-risk derivatives market. Securities and Exchange Board of India (Sebi), the market regulator, decided to step in.

On October 1, 2024, Sebi’s first set of tightened derivatives rules came into effect, and the impact showed up almost at once. Volumes softened and earnings forecasts were trimmed.

For an industry used to unusually high retail activity since the pandemic, the slowdown was unfamiliar. The message was clear: the F&O wave had to ebb. Additional tightening proposals in the weeks that followed reinforced that this was the beginning of a regulatory reset, not a passing phase.

With a Sebi study finding that 93% of over 1 crore individual F&O traders incurred average losses of around ₹2 lakh per trader during the three years from 2021-22 to 2023-24, the regulator wanted guardrails that would temper excessive speculation and reduce systemic risk.

“Sebi’s regulatory changes have reshaped the broking industry, with brokers like Angel One, heavily dependent on F&O and retail clients, experiencing significant impacts,” says Vinit Bolinjkar, head of research at Ventura, a brokerage.

For Angel One, consolidated profit fell 50% year on year to ₹212 crore in the second quarter of 2025-26, while gross revenue dropped 21% to ₹1,204 crore. Gross client acquisition in the same period was down 41.9% and total orders fell 26.3%.