MTF book fell 38% to ₹1.51 lakh crore, the first monthly decline in seven months, after margin calls forced investors to trim leveraged positions. The drop from the ₹1.59 lakh crore record at the end of September underscores a sharp contraction in the fund‑based margin market.
The NSE’s funded book sits at ₹1.44 lakh crore, while the BSE accounts for ₹7.427 crore of the total. Mid‑caps and small‑caps, which make up 20% and 49% of the exposure respectively, are the most vulnerable, with the Nifty Midcap index down 6.2% and the Smallcap index plunging nearly 9% over the past week.
Broader breadth has deteriorated sharply; the BSE advance‑decline ratio fell to 0.32 on Oct 23, with 1,261 stocks advancing against 3,889 decliners. The average for October is 0.83, the lowest in seven months, signalling a widening value‑to‑price chasm.
Dhiraj Relli, MD‑CEO of HDFC Securities, said investors and brokers are likely to pare positions when such corrections hit, especially when collateral values fall below margin thresholds. "Margin calls can trigger a cascade of liquidations in the more volatile mid‑ and small‑cap segments," he added.
MTF growth has cooled, expanding only 30% so far in 2026 versus 36% in 2025 and 70% in 2024. Analysts expect the next quarterly filing on Nov 15 to show whether the book will rebound or continue to contract, with a focus on the impact of upcoming earnings and the potential for further breadth erosion.