India’s Groww, Zerodha lose millions of users

Indian stockbroking platforms Groww and Zerodha saw their active client numbers fall between February and August 2025, according to National Stock Exchange (NSE) data.

Groww, a Bengaluru-based brokerage, had its client base drop from 13 million to 12.1 million during this period, though it remains the largest in the country.

Zerodha’s active clients declined from 8 million to 7.3 million, while Angel One also fell from 7.6 million to 7 million.

The slowdown in active clients across major platforms follows regulatory restrictions on futures and options trading, including changes to lot sizes, margin norms, and transaction costs.

🔗 Source: The Economic Times

🧠 Food for thought

Implications, context, and why it matters.

Regulatory tightening creates uneven impact across different broker business models

The current client decline reflects years of progressive F&O regulation by SEBI, including recent limits on weekly options contracts to one per exchange and increased minimum trading amounts to reduce market manipulation1.
Earlier regulatory changes set this pattern—SEBI’s 2018 margin requirement updates forced brokers to collect higher total margins, potentially reducing trading volumes, especially in single stock F&O2.
The impact varies by broker revenue model: while established platforms built on high-volume F&O trading face client losses, the broader industry shifted from transaction-based to fee-based models, generating INR 382 billion in FY 2023 with 13.73% annual growth3.
This regulatory approach dates back to SEBI’s 2015 proposal to increase minimum F&O contract sizes from ₹2 lakh to ₹5-10 lakh, aimed at protecting retail investors from sophisticated algorithmic trading strategies4.

Market entry timing proves crucial during regulatory transitions

PhonePe’s growth from 173,786 to 305,319 active clients in just one year demonstrates how new entrants can capitalize during regulatory shifts that impact established players.
The timing advantage is significant—PhonePe entered broking in August 2023, just as F&O restrictions were tightening, allowing them to build their platform around the new regulatory environment rather than adapting existing high-volume F&O-dependent models.
This contrasts with the trajectory of market leaders: Zerodha had emerged as India’s largest broker by 2019 through its low-cost trading model during the F&O boom5, but now faces the challenge of adapting to a restricted F&O environment.
Paytm Money’s growth to 758,335 clients suggests that wealth management-focused platforms may be better positioned during F&O restrictions, as they’re less dependent on high-frequency derivative trading volumes.