Stockbroking firms continue to slide day after STT hike in budget; Groww tanks nearly 6%

New Delhi (PTI): Shares of stockbroking firms continued to slide on Monday after Finance Minister Nirmala Sitharaman announced an increase in the Securities Transaction Tax (STT) on Futures and Options trade to discourage small investors from speculative trading in derivatives.

The stock of Billionbrains Garage Ventures, the parent company of Groww, tanked 5.86 per cent, Geojit Financial Services lost 2.98 per cent, Anand Rathi Share And Stock Brokers declined 2.30 per cent, Angel One edged lower by 2.26 per cent, and 5paisa Capital dipped 2 per cent on the BSE.

These stocks had also faced selling pressure in the previous trade.

"Indian equities ended sharply lower on Sunday as the Finance Minister proposed an increase in the STT on F&O transactions in the Union Budget 2026. Higher STT directly impacts the trading profitability for active participants and raises concerns around liquidity and volume growth. This triggered a strong selling pressure in capital market stocks including brokerages and exchanges," Ajay Menon, MD & CEO – Wealth Management, Motilal Oswal Financial Services, said.

In her Budget speech for 2026-27, Sitharaman said the STT on futures contracts will be raised to 0.05 per cent from 0.02 per cent.

"STT on options premium and exercise of options are both proposed to be raised to 0.15 per cent from the present rate of 0.1 per cent and 0.125 per cent, respectively," she said.

Kotak Securities Managing Director and Chief Executive Shripal Shah said the steep increase in STT is likely to raise impact costs for traders, hedgers, and arbitrageurs.

"The intent appears to be volume moderation rather than revenue maximisation, as any potential revenue gain could be offset by lower derivative volumes," he added.

A Balasubramanian, Managing Director and CEO, Aditya Birla Sun Life AMC, said the increase in STT on derivatives may impact trading, but it should be looked at as an encouragement to gradually shift towards the cash market and long-term investing.