Margin Trading Funding (MTF) continues to grow in popularity among retail investors in India, offering them a leveraged way to participate in the stock market. As of August 1, 2025, the total MTF book has soared to ₹92,098.50 crore, surpassing the previous bull market peak of ₹85,400 crore recorded in September 2024. This sharp rise signals a significant uptick in investor borrowing and confidence, despite the broader market remaining cautious.

The net book addition of ₹252.79 crore in August alone suggests that more investors are turning to MTF to amplify their trading power. New positions worth ₹5,951.39 crore were added, while ₹5,698.60 crore worth of positions were liquidated. This indicates not just growing interest in MTF but also active portfolio rebalancing and risk management by traders.

MTF allows an investor to buy stocks by paying only a fraction (usually 20%) of the total value, while the rest is funded by the broker. The interest rate on the borrowed amount ranges between 9% and 15% annually. Although this structure increases potential returns, it also exposes the investor to significant downside risk in case of market corrections or adverse price movements.

According to recent data, several companies have emerged as top choices for investors using MTF. Hindustan Aeronautics leads the chart with a funded amount of ₹1,320.44 crore, followed by Tata Motors with ₹1,294.05 crore and Tata Consultancy Services with ₹1,227.52 crore. These companies also feature high leverage multiples, indicating strong conviction from investors.

Here’s a closer look at the top MTF-funded companies as of August 1, 2025:

• Hindustan Aeronautics: Funded Quantity – 30,50,483 shares; Funded Amount – ₹1,320.44 crore; Exposure – 1.43%; LTP – ₹4,537.90; MTF Price – ₹1,139.01; Margin – 3.98x

• Tata Motors: Funded Quantity – 1,93,70,158 shares; Funded Amount – ₹1,294.05 crore; Exposure – 1.41%; LTP – ₹655.60; MTF Price – ₹156.86; Margin – 4.18x

• Tata Consultancy Services: Funded Quantity – 39,77,195 shares; Funded Amount – ₹1,227.52 crore; Exposure – 1.33%; LTP – ₹3,074.40; MTF Price – ₹676.37; Margin – 4.55x

• Jio Financial Services: Funded Quantity – 3,93,84,321 shares; Funded Amount – ₹1,106.00 crore; Exposure – 1.20%; LTP – ₹333.90; MTF Price – ₹83.48; Margin – 4.00x

• Reliance Industries: Funded Quantity – 73,84,802 shares; Funded Amount – ₹970.88 crore; Exposure – 1.05%; LTP – ₹1,441.50; MTF Price – ₹310.53; Margin – 4.65x

Other notable names include Mazagon Dock Shipbuilders (₹946.86 crore), Sammaan Capital (₹817.88 crore), CDSL (₹816.58 crore), Bharat Electronics (₹806.38 crore), Trent (₹754.97 crore), and Yes Bank (₹701.04 crore).

Interestingly, Yes Bank and Sammaan Capital show very high funded quantities, suggesting strong retail interest in mid-cap and turnaround stories. In contrast, large-cap players like Reliance and TCS continue to dominate in absolute exposure, reflecting investor trust in blue-chip companies.

The "Margin on Dhan" column offers insight into the leverage available. For example, Reliance Industries is available at a 4.65x multiple, the highest on the list. Sammaan Capital has the lowest leverage at 2.00x. While higher leverage enables bigger positions with less capital, it also heightens the risk of losses and potential margin calls.

A tweet that followed this data release noted that MTF has now reached approximately ₹96,000 crore in early August. This suggests sustained momentum and possibly even stronger interest in the coming weeks. The tweet also highlighted that retail investors are increasingly viewing MTF as a “safer” alternative to Futures & Options (F&O) due to its regulated and structured nature. However, experts remain cautious.

Market voices expressed varied opinions on X:

• Vivek Bajaj raised questions about the actual safety of MTF, hinting at potential hidden risks.

•  Trader Door and  gilb86418 compared MTF trading to “playing with fire,” emphasizing the risks associated with high leverage.

• Mind khichdi noted that although the MTF book is still small compared to India’s total market cap of over $5 trillion, its rapid expansion could be a red flag signaling market overheating.

The growing interest in MTF, especially among retail traders, reflects both optimism and a thirst for higher returns. However, it’s crucial to remember that leverage is a double-edged sword. While it enhances profits in favorable markets, it can magnify losses when prices go south.

For investors, this underscores the importance of:

• Monitoring positions closely

• Factoring in interest costs

• Avoiding over-leveraging

• Being ready for margin calls

In conclusion, Margin Trading Funding in India is witnessing an unprecedented boom as retail investors aggressively enter the market with borrowed capital. With stocks like HAL, TCS, Tata Motors, and Reliance Industries leading the way, MTF has become a central part of trading strategies. Still, given the potential risks, it’s advisable to tread carefully and seek professional advice where needed.

Disclaimer: This article is for informational purposes only and should not be considered investment advice. Always consult a qualified financial advisor before making trading or investment decisions.