Highlights

• India’s capital market infrastructure sector generated over Rs 700 bn in revenues in FY25, led by brokers and exchanges.
• Demat accounts and mutual fund folios are projected to grow at a steady pace through FY28, supported by younger investors.
• Brokers and exchanges are expected to outpace other segments, with differentiated growth trajectories emerging across listed players.

India’s capital market infrastructure sector, comprising brokers, stock exchanges, depositories, and registry and transfer agents (RTAs), recorded revenues exceeding Rs 700 bn in FY25, according to a recent Jefferies report. Brokers contributed nearly Rs 500 bn, while exchanges accounted for about Rs 200 bn, with the remainder generated by depositories and RTAs. The sector’s expansion has tracked rising retail participation in equities and mutual funds over recent years.

Volumes and Participation to Remain Key Drivers

Jefferies noted that revenues across capital market infrastructure companies remain closely linked to trading volumes and investor participation. Over FY26–FY28, mutual fund assets under management (AUM) are projected to grow at a 16% compound annual rate, supported by market appreciation and continued net inflows. Cash market average daily turnover (ADTO) is estimated to rise at 15%, while futures and options (F&O) premium ADTO is expected to grow at a relatively moderate 12%, reflecting a cooling in derivatives activity following regulatory changes.

Investor participation is also expected to broaden. The number of demat accounts is forecast to increase from 192 million in FY25 to 304 million by FY28, while mutual fund folios are projected to rise from 235 million to 377 million over the same period. Mutual fund AUM is estimated to grow from Rs 67 trillion to Rs 103 trillion. Younger investors are driving incremental participation, with those under 30 years accounting for around 40% of the investor base in FY25, compared with about 20% before the pandemic. IPO activity has further supported new account additions.

Citius: Brokers and Exchanges Expected to Outpace

Jefferies expects brokers and exchanges to grow faster than other segments within capital market infrastructure. Among tracked companies, Groww and BSE (BSE) are projected to post the highest revenue growth over FY26–FY28, at 29% and 28% CAGR, respectively. CDSL (CDSL) is expected to grow at 21%, followed by KFIN Technologies (KFINTECH) at 19% and CAMS (CAMS) at 13%.

BSE’s growth outlook is linked to rising traction in index options, with its share of the index options market estimated to increase to around 35% by FY28. This is supported by higher utilisation of co-location infrastructure and sustained options activity. Groww’s expansion is expected to be driven by broader product offerings, including margin trading, commodities, bonds, and wealth solutions, alongside a maturing client base.

Overall, Jefferies highlighted that growth across the sector will vary based on scale, diversification into adjacent businesses, and resilience to evolving regulatory conditions.

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