Capital market infrastructure tops ₹70,000 crore in FY25

India’s capital market infrastructure has scaled a new high of about ₹70,000 crore in revenues in FY25, with brokers and exchanges accounting for the bulk of the growth, according to a report by Jefferies.

The global investment bank said it remains positive on broker-led platforms, particularly Groww, as well as select registry and transfer agents, arguing that product differentiation, diversification and operating leverage will drive outperformance over the next few years.

In its latest sector note, Jefferies said the infrastructure ecosystem — comprising brokers, exchanges, depositories and registry and transfer agents — has emerged as a key beneficiary of the steady shift in household savings towards equities and mutual funds.

Brokers alone contributed roughly ₹50,000 crore of sector revenues in FY25, while exchanges added another ₹20,000 crore, underscoring the growing depth and activity in India’s capital markets.

Jefferies said it prefers broker platforms with strong technology, high user engagement and the ability to expand beyond plain-vanilla equity trading.

It initiated or maintained a positive stance on Groww, highlighting its rapid rise to market leadership in retail broking within a short span of operations.

The brokerage expects Groww to deliver superior revenue and earnings growth over FY26–28, driven by new products such as margin trading facilities, wealth management, commodities and adjacent financial services, alongside operating leverage.

It has initiated coverage on Groww with a buy rating, citing its rapid rise as a retail broking market leader within four years, supported by a strong user interface, fast product rollout and word-of-mouth traction.

Jefferies expects robust revenue and earnings growth over FY26–28, with the stock trading at a meaningful discount to global peer Robinhood and domestic market infrastructure peers.

The brokerage maintained a buy on KFin Tech, positioning it as a relatively lower-risk play on mutual funds, direct equities and international markets, with steady growth prospects and upside from the faster ramp-up of its international Ascent business.

CAMS is also initiated with a buy, highlighting its leadership in the RTA space, stable high-margin mutual fund business and underappreciated non-MF segments, though yield compression remains a key risk.

Jefferies maintained a hold rating on BSE, acknowledging strong recent execution and options growth but flagging concerns around reliance on Sensex weekly options, regulatory risks, rising competition in co-location and limited diversification.

The brokerage initiated coverage on CDSL with a hold call, as its dominant position in the depository duopoly and solid growth outlook are seen as largely priced in, with risks stemming from constrained pricing power, CKYC-to-KRA transition issues and limited avenues for diversification.

Beyond brokers, Jefferies also highlighted the role of exchanges and registrars in the ₹70,000 crore opportunity set. It sees BSE continuing to benefit from gains in index options market share, though it remains more cautious on valuation and regulatory risks.

Among registrars, the report pointed to KFIN as a relatively defensive play with growing diversification, including international and non-mutual fund businesses, and lower exposure to regulatory shocks compared with brokers and exchanges.

While acknowledging that regulatory risks are a constant feature of the sector, Jefferies said registry and transfer agents are better insulated, given their limited reliance on trading-linked revenues.

At the same time, it noted that companies with strong moats, sticky clients and the ability to innovate are best placed to compound growth as India’s equity culture deepens.

With household participation rising and platforms expanding into new products and services, the brokerage believes select brokers and intermediaries remain well positioned to outgrow the broader market in the coming years.

Published on December 23, 2025