Margin buying is at a record: ₹1.95 lakh crore and counting

Indian equities bought on borrowed money have risen from ₹17,417 crore in FY20 to ₹1.95 lakh crore in FY27 so far. That figure counts margin trading funding (MTF) plus loans against shares from banks and NBFCs. Eleven-fold in six years.

Data: NSE, BSE, CMIE, Bloomberg, company reports, DSP; as of July 2026. NBFC loans-against-shares estimated from latest disclosures.

At 0.41% of total market capitalisation, equity-linked leverage is the highest on record. Against free-float market cap, the truer measure of tradable supply, it is roughly 0.87%. The FY08 comparison flatters the present: recorded leverage then was just 0.08% of market cap, but promoter pledges, informal broker financing and NBFC lending were poorly reported. Even at lower visible levels, forced deleveraging became a major source of stress in that crash.

Leverage rarely triggers a market decline; it amplifies one. Falling prices shrink collateral values, margin shortfalls rise, brokers liquidate, and the liquidation itself produces the next round of margin calls. That loop runs faster when funded equity positions coexist with heavy activity in stock and index derivatives, which is the current Indian market structure.

For perspective, US margin debt runs near 1.95% of market cap, so India’s absolute level remains low by comparison. The comparison only goes so far, though. The variable that decides how much stress a downturn produces is how fast leverage has grown relative to the market itself, and an eleven-fold rise in six years is the part of the record worth respecting.

What we’ll watch: the leverage-to-free-float ratio each quarter, and whether MTF balances keep compounding faster than market cap itself.