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Indian broking is shifting toward mobile-first execution, API connectivity and algorithmic tools as investors seek lower friction, real-time analytics and automated strategies. SIHL has already invested in SIHL Moneymaker, Fundspro and ALGOFY, and received NSE approval for its in-house algo platform in August 2026. The digital shift is strategically important because SIHL can use technology to deepen engagement beyond its physical Gujarat franchise and improve scalability without replicating the full cost of branch-led expansion.

The key drivers are:

• Digital-platform brokerage contributed 42.6% of FY26 brokerage income versus 17.6% in FY24

• SIHL Moneymaker had 33,287 downloads and more than 12,000 active registered/trading users by FY26

• API/algo trading can attract higher-frequency and technologically sophisticated clients

• Technology-led acquisition can support expansion into Tier 2/3 cities and geographies beyond Gujarat

MTF is becoming an increasingly relevant ancillary revenue pool for brokers as investors use funded positions to enhance purchasing power. CareEdge reports that the industry MTF book reached about INR 0.88 lakh Cr in June 2025 and grew at an 87% CAGR from March 2020 to June 2025. SIHL is directing INR 60.0 Cr of IPO proceeds toward working capital, while its own MTF book grew 117.4% in FY26 and accelerated further after year-end, making MTF a key growth lever as well as a balance-sheet risk.

The key drivers are:

• SIHL FY26 MTF book increased to INR 21.0 Cr from INR 9.6 Cr in FY25

• FY26 MTF interest income was INR 2.2 Cr, or 3.1% of revenue from operations

• MTF users reached 476 in FY26 with 0.0% reported default rate and 153.8% collateral coverage

• IPO-funded working capital materially increases capacity to scale the funded book, subject to risk and regulatory limits

Full-service brokers are increasingly supplementing transaction brokerage with distribution, advisory, wealth-management and lending revenues as core broking fees face competitive pressure. Household allocations to equities and mutual funds are expected to rise over time, while HNI customers continue to prefer relationship-led models. SIHL is positioned to cross-sell mutual funds, PMS/advisory products, AIF offerings, MTF and global-market access to an existing client base, potentially reducing reliance on pure brokerage volumes.

The key drivers are:

• Mutual-fund assets under distribution rose to INR 54.4 Cr in FY26 from INR 37.5 Cr in FY24

• SIHL Dynamic Growth Fund received Category III AIF registration in February 2026 through SIHL AIF Investment Trust

• The Company plans to add SIF and insurance distribution alongside existing mutual-fund/PMS channels

• GIFT City subsidiary and NSEIX referral arrangement enable regulated access to international equities and investment products

The broking industry is highly cyclical and regulation-intensive. Revenue is exposed to market activity, investor sentiment and fee compression, while SEBI reforms can materially change trading economics, especially in derivatives and margin products. Digitalisation also increases cybersecurity and technology-spend requirements. Smaller and regional brokers must compete with large discount and full-service platforms that can spread compliance and technology costs across much larger client bases.

The key risks are:

• SEBI changes to derivatives, margin requirements and pass-through charges can alter trading volumes and economics

• Aggressive price competition and zero/low-brokerage models pressure yields

• Cybersecurity incidents, system outages and data breaches can disrupt execution and damage client trust

• Market volatility and client losses can elevate margin, credit and liquidity risks, particularly in F&O and MTF

Policy support is primarily market-infrastructure and financialisation-led rather than subsidy-driven. Digital KYC, dematerialisation, exchange infrastructure and investor-protection frameworks have lowered access barriers and expanded formal participation. The IFSC regime at GIFT City provides a regulated framework for international financial services, while SEBI has continued to refine MTF and algo-trading rules. These measures can expand addressable services for compliant brokers, although they simultaneously raise governance and technology standards.

The key policies are:

• GIFT City/IFSC framework supports SIHL's global-access subsidiary and international product strategy

• SEBI's revised MTF framework provides clearer rules around eligible securities, leverage, margins and liquidation

• Digital onboarding and demat infrastructure support lower-friction customer acquisition and servicing

• Stronger investor-protection and surveillance norms may improve trust in organised brokers while increasing compliance costs