Angel One Slides 5% on SEBI Weekly Derivatives Curbs: A Detailed Analysis
On September 11, 2025, shares of Angel One Ltd., one of India’s leading retail broking firms, dropped by 5.32% to ₹2,210 on the Bombay Stock Exchange (BSE), following reports that the Securities and Exchange Board of India (SEBI) is planning to introduce stringent curbs on weekly futures and options (F&O) contracts. This development, reported by CNBC-TV18 and Business Standard, stems from SEBI’s consultation paper, set to be released within a month, which proposes transitioning to monthly expiries and imposing thresholds on retail participation in the F&O segment. The move is part of SEBI’s ongoing efforts to curb speculative trading, which has led to significant retail investor losses, estimated at ₹1.10 lakh crore in FY25. This article provides a comprehensive analysis of the stock price decline, SEBI’s proposed regulations, their impact on Angel One, and the broader market context, drawing on verified reports from sources like CNBC-TV18, Business Standard, and Livemint.
Background: SEBI’s Regulatory Push
Context of SEBI’s Derivatives Curbs
SEBI’s crackdown on the derivatives market follows a 40-fold boom in trading volumes, driven largely by retail investors, which led to substantial losses, per Business Standard. A SEBI study revealed that retail traders lost ₹1.05 lakh crore in FY25, a 41% increase from ₹74,812 crore in FY24, with 91% of traders incurring losses, per Moneycontrol. To address this, SEBI has implemented measures since October 2024, including:
- Reducing weekly expiries from six to two per exchange.
- Increasing option contract sizes and margin requirements.
- Mandating upfront premium collection and intraday position monitoring, per Livemint.
The latest proposal, reported on September 11, 2025, by CNBC-TV18, includes:
- Ending weekly F&O contracts, transitioning to monthly expiries with a defined glide path.
- Introducing same-day expiries across exchanges.
- Setting thresholds to limit retail participation in F&O, per Business Standard.
These measures aim to deepen the cash equity market, which SEBI Chairman Tuhin Kanta Pandey emphasized as the “true foundation of capital formation,” per The Economic Times.
Timing and Market Reaction
The announcement, exclusively reported by CNBC-TV18 on September 11, triggered an immediate sell-off in capital market stocks. Angel One’s shares fell 5.32% to ₹2,210, while BSE Ltd. dropped 4.26% to ₹2,096, per Business Standard. The Nifty Capital Markets index, a key barometer, declined 1.52%, reflecting broader sector pressure, per Business Standard. This follows a 19% drop in Angel One’s stock over six trading sessions since August 21, when SEBI first hinted at extending derivatives tenures, per CNBC-TV18.
Angel One’s Business Model and Vulnerability
Overview of Angel One
Angel One Ltd., formerly Angel Broking, is India’s largest independent listed retail broking house, incorporated in 1996 and converted to a public company in 2018, per Business Standard. With a client base of 33.57 million as of August 2025, Angel One derives 77% of its gross broking revenue from the F&O segment, charging a flat ₹20 per order, per Livemint. Its market capitalization stood at ₹20,464 crore on September 11, 2025, down from a 52-week high of ₹3,502.60, per Business Standard.
Impact of F&O Curbs on Revenue
Angel One’s revenue model, heavily reliant on F&O order volumes, is particularly sensitive to SEBI’s curbs. In Q4FY25, the first full quarter under earlier SEBI regulations (increased lot sizes, fewer expiries, higher margins), Angel One’s F&O orders fell 25% sequentially to 23 crore, recovering marginally by 5% to 24.1 crore in Q1FY26, per Livemint. This led to a 22% quarter-on-quarter drop in gross broking income to ₹633 crore in Q4FY25, per Livemint. The proposed shift to monthly expiries could further reduce order volumes, as weekly contracts drive speculative trading, per CNBC-TV18. Rajesh Baheti of Crosseas Capital Services estimated a 10–15% revenue hit for discount brokers like Angel One, per CNBC-TV18.
Financial Performance
Angel One’s Q1FY26 results reflect the strain from SEBI’s regulations:
- Revenue: Fell 19% year-on-year to ₹1,243 crore, per Livemint.
- Profit After Tax (PAT): Slumped 60% to ₹115 crore from ₹293 crore, with EBITDA margins compressing from 38% to 22%, per Livemint.
- Client Acquisition: Dropped 40% year-on-year to 550,000 in June 2025, per Livemint, despite a 31% client base growth to 33.57 million, per Screener.
These metrics highlight Angel One’s dependence on F&O volumes, making SEBI’s curbs a significant threat, per Moneycontrol.
Market Dynamics and Comparative Impact
BSE vs. Angel One
While both BSE and Angel One faced sell-offs, their revenue models differ, affecting their sensitivity to SEBI’s curbs, per Livemint:
- BSE: Charges 0.0325% (₹3,250 per crore) on options premium value, with average daily premium turnover (ADPT) rising 35% to ₹11,783 crore in Q4FY25 despite earlier curbs, per Livemint. BSE’s FY26 earnings per share (EPS) are projected to grow 54% to ₹50, per Motilal Oswal Financial Services.
- Angel One: Relies on flat ₹20 per order fees, with a 22% drop in order volumes in Q3FY25 to Q4FY25, leading to a projected 24% EPS decline to ₹98 in FY26, per Livemint.
BSE’s linkage to premium value cushions it against volume drops, while Angel One’s order-based revenue model exposes it to greater risk, per The Economic Times.
Broader Capital Market Impact
Other capital market stocks, like CDSL and Motilal Oswal, also declined 1.5–4.5% on August 5, 2025, when SEBI’s initial proposals surfaced, per Upstox. The Nifty Capital Markets index’s 1.52% drop on September 11 reflects sector-wide concerns, per Business Standard. Analysts like Ambareesh Baliga noted that extended F&O tenures could reduce turnover, impacting brokerages’ profitability, per Business Standard.
SEBI’s Rationale and Industry Concerns
Protecting Retail Investors
SEBI’s measures stem from concerns over retail investor losses, with 9 out of 10 traders losing money in F&O, per Moneycontrol. The regulator’s study showed retail losses rose to ₹1.1 lakh per trader in FY25 from ₹86,728 in FY24, per The Economic Times. By limiting weekly expiries and raising margin requirements, SEBI aims to deter speculative trading, which contributes to market volatility and undermines price formation, per Ananth Narayan’s remarks at the CII Capital Markets Conclave, per Moneycontrol.
Industry Pushback
Brokers and exchanges worry that reduced volumes will hit revenues. Rajesh Baheti estimated a 50–60% topline hit for BSE and 10–15% for full-service brokers, per CNBC-TV18. Kunal Kamble of Bonanza noted that longer expiries increase option premiums and margins, deterring retail traders, per The Economic Times. SEBI’s consultation paper will seek stakeholder feedback, but immediate Securities Transaction Tax (STT) changes require Union Budget amendments, delaying implementation, per Upstox.
Angel One’s Strategic Response
Diversification Efforts
To offset F&O reliance, Angel One is diversifying into a full-spectrum financial services distributor, per Livemint. Initiatives include:
- Expanding wealth management and mutual fund distribution.
- Increasing client acquisition, with a 2.1% month-on-month rise to 30.13 million in January 2025, per Livemint.
- Raising brokerage charges to offset volume drops, per Livemint.
However, these efforts are unlikely to shift revenue significantly in the short term, with F&O still dominating at 77%, per Livemint.
Analyst Outlook
Motilal Oswal maintained a ‘BUY’ rating on Angel One, suggesting that a 10% volume drop could be offset by increasing realization from ₹19.7 to ₹25, per Business Today. JM Financial initiated coverage with a ₹2,700 target price, valuing Angel One at 19x FY27 EPS of ₹141, per posts on X. However, the stock’s 27.76% decline over three months and 6.18% over the past year reflect investor caution, per Business Standard.
Fan and Social Media Sentiment
Posts on X reflect mixed sentiments. @Sharad9Dubey noted Angel One’s resilience, citing JM Financial’s ₹2,700 target, while @itsprekshaBaid highlighted a support level near ₹2,270, per posts on X. Conversely, @compoundingaiin emphasized rising funding and commodities share, suggesting long-term potential despite short-term volatility, per posts on X. Fans remain optimistic about Angel One’s client base growth but acknowledge regulatory risks.
Broader Economic Context
Derivatives Market Trends
India accounts for nearly 60% of global equity derivatives volumes, per The Economic Times, but retail-driven speculation has raised systemic risks. SEBI’s earlier measures, like capping end-of-day options exposure at ₹1,500 crore, aim to stabilize markets, per Reuters. The proposed shift to monthly expiries could reduce volatility but impact brokers’ revenues, per Business Standard.
Capital Market Stocks
The Nifty Capital Markets index’s decline reflects broader sector challenges, with BSE less impacted due to its premium-based revenue, per Livemint. Angel One’s retail focus makes it more vulnerable, per Moneycontrol, especially as client acquisition slowed 40% year-on-year in June 2025, per Livemint.
Conclusion
Angel One’s 5.32% stock slide on September 11, 2025, to ₹2,210, triggered by SEBI’s proposed curbs on weekly F&O contracts, underscores the brokerage’s vulnerability to regulatory changes. With 77% of its revenue from F&O, the shift to monthly expiries and retail participation thresholds threatens order volumes, as seen in a 22% drop in Q4FY25. While BSE benefits from premium-based revenue, Angel One’s flat-fee model faces greater risk, with analysts projecting a 10–15% revenue hit. Despite diversification efforts, Angel One’s short-term outlook remains challenging, though long-term potential persists, per JM Financial’s bullish coverage. SEBI’s focus on protecting retail investors, who lost ₹1.10 lakh crore in FY25, drives these reforms, balancing market stability against industry concerns. As the consultation paper looms, Angel One must navigate a turbulent regulatory landscape to sustain its position as India’s leading retail broker.
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