The Indian stock market witnessed a significant shift in 2025, with major brokerage platforms like Zerodha and Groww experiencing a notable decline in active users. This downturn, affecting even the largest players, signals a broader market slowdown and evolving investor preferences.
Data from the National Stock Exchange (NSE) reveals a contraction in active client bases across several leading discount brokers between February and August 2025. Groww, despite remaining the largest brokerage in the country, saw its user base decrease from 13 million to 12.1 million. Zerodha's active clients fell from 8 million to 7.3 million, while Angel One experienced a similar drop from 7.6 million to 7 million. Upstox also saw a reduction in its user numbers. Overall, the Indian discount brokerage sector shed 5.35 million active users in 2025.
Several factors contributed to this decline. Stricter regulatory norms implemented by the Securities and Exchange Board of India (SEBI) played a significant role. These regulations included tighter margin rules, reduced weekly expiries for futures and options (F&O) contracts, elevated capital requirements, and higher taxation on options trading. These measures collectively dampened retail interest in derivatives trading, a segment popular among retail investors due to its low capital requirements and high return potential.
In addition to regulatory changes, a shift towards more stable investment alternatives also influenced the exodus from discount broking platforms. Investors are increasingly turning to mutual funds, portfolio management services (PMS), and alternative investment funds (AIFs).
While leading discount brokers faced declines, some brokerage firms experienced gains. SBI Securities, Paytm Money, and ICICI Securities added active clients, indicating a varied landscape within the broking industry. Paytm Money, in particular, recorded an uptick in active clients. Smaller brokers who focus less on F&O trading and more on advisedriven diversified portfolios are also seeing some traction.
The overall active user base in the Indian stock market also reflected this slowdown. After a brief rebound in August 2025, the total number of active users fell again in September 2025, reaching 45.31 million clients. This decrease corresponds with a wider drop in the total active user base of the Indian stock market.
Furthermore, the Indian stock market's performance in 2025 has been lackluster compared to global markets. While other markets saw significant gains, the Sensex delivered meager returns. This underperformance, coupled with high valuations and slow earnings growth, has led to foreign investors selling off Indian stocks. Global uncertainties and domestic woes, including poor corporate earnings and uncertainties surrounding international trade policies, further suppressed retail participation.
Despite the challenges, the NSE reported a surge in unique trading accounts, surpassing 24 crore in November 2025. This indicates growing retail confidence and a transformation of India's investing landscape. Individual investors, both direct and through mutual funds, held a significant portion of NSE-listed companies.
