Angel one’s second act: Testing a broader financial playbook

As tighter regulations slow derivatives trading, Angel One is betting on insurance, wealth and asset management to reduce its reliance on volatile trading volumes.

For years, Alok Gupta, a 56-year-old IT professional, traded equities cautiously. After the pandemic, he shifted to futures and options, drawn by the promise of quick returns. Early gains of ₹7–8 lakh pushed him to increase his exposure to nearly ₹25 lakh—only to suffer heavy losses later.

Gupta’s experience mirrors that of millions of retail traders who flocked to derivatives during the post-pandemic boom. A Sebi study later found that 93% of over one crore individual F&O traders incurred average losses of about ₹2 lakh between FY22 and FY24. Alarmed by the scale of retail losses and systemic risk, the market regulator tightened derivatives norms starting October 1, 2024.

The impact was swift. Trading volumes softened, earnings estimates were cut, and a sector accustomed to frenetic retail participation faced an unfamiliar slowdown. Further regulatory proposals reinforced the message that this was a structural reset, not a temporary pause.

For Angel One, among the most derivatives-dependent brokers, the impact was visible. Consolidated profit fell 50% year-on-year to ₹212 crore in the second quarter of FY26, while gross revenue declined 21% to ₹1,204 crore. Client acquisition dropped nearly 42%, and total orders fell 26%.

Yet the mood inside the firm remains steady.

Chairman Dinesh Thakkar, a market veteran who has navigated multiple regulatory cycles since the late 1980s, sees the changes as part of a long-term strengthening of the ecosystem. “Every regulatory change has ultimately helped markets mature,” he says, arguing that Sebi’s aim is to strike a balance between trading and investing and reduce losses among inexperienced participants.

Still, the regulatory reset exposed a core vulnerability for derivatives-heavy brokers: dependence on trading velocity. For Angel One, which had already begun diversifying into wealth management and credit, the slowdown accelerated a strategic test.

“The loss of experienced F&O traders and compressed revenues highlight the need for diversification,” says Vinit Bolinjkar of Ventura Securities.

Building Beyond Broking

The groundwork for Angel One’s second phase was laid in 2018, when it shut all physical branches and went fully digital. The move slashed fixed costs and reshaped customer acquisition, helping the firm add nearly 18 lakh clients in its first digital-only year—more than it had added in the previous two decades combined.

That transition paved the way for a broader financial-services push. In March 2025, Angel One appointed Ambarish Kenghe as group CEO to scale businesses beyond broking.

“This is not a pivot; it’s an expansion,” Kenghe says. Trading may bring users onto the platform, but products like insurance, SIPs, wealth management and credit tend to follow as financial needs evolve.

The company has deliberately avoided areas like UPI payments and overseas expansion, choosing instead to focus on businesses it believes it can scale sustainably.

New Growth Engines

Over the past two years, Angel One has rolled out multiple verticals. Its wealth management business has crossed ₹6,000 crore in assets under management. Credit distribution nearly doubled sequentially to about ₹460 crore in Q2 FY26. The asset management arm has crossed one lakh folios across 15,700 PIN codes. In insurance, the firm has formed a joint venture with Singapore-based LivWell to build a tech-led life insurance platform.

While none of these verticals yet materially alter the revenue mix, they are designed to deepen customer engagement and create recurring financial behaviour. “Wealth and credit can generate cash flows faster, while AMC and insurance are sentimentally positive for shareholders,” says market analyst Ambareesh Baliga.

JM Financial expects Angel One’s profit after tax to decline 15% in FY26 before recovering from FY27 onwards.

Execution Risks Remain

The strategy is unfolding amid intense competition. Angel One currently has the lowest revenue per client among major brokers, underscoring both its vulnerability and opportunity to increase wallet share. Execution, analysts warn, will be critical.

Running multiple financial services through a single app adds complexity. Angel One is leaning heavily on AI to manage scale—using its in-house chatbot, Ask Angel, to resolve most customer queries and automate workflows. But risks remain: regulatory tightening, higher capital requirements, cybersecurity demands and the challenge of integrating services without hurting user experience.

Despite lower trading volumes, the client funnel remains strong. Angel One added 1.7 million clients in Q2 FY26—the highest among brokers. The real question now is whether it can convert scale into deeper engagement quickly enough.

As retail trading enters a more disciplined phase, Angel One’s second act will be judged not by how it navigates the slowdown, but by whether it uses it to build a more resilient, diversified financial platform before the next market cycle begins.