Billionbrains Garage Ventures Reports Decline in Equity Derivatives Revenue
Billionbrains Garage Ventures, the parent company of the stockbroking platform Groww, experienced a 14.3% decrease in equity derivatives revenue quarter-on-quarter in the September quarter of FY27. The company attributed most of this downturn to the Securities and Exchange Board of India’s new Closing Auction System.
Impact of the New Closing Auction System
In its quarterly results, Groww noted that this decline aligns with the overall trend across the industry following the introduction of the Closing Auction System on August 3, 2026. The new system modifies how closing prices for stocks that are eligible for futures and options trading are established.
With the Closing Auction System, exchanges now conduct a closing auction to determine the final price of these eligible stocks. This adjustment has led to changes in trading volumes as market participants adapt to the new process.
Challenges for Traders
The new system also introduces a disparity between cash-market trading and derivatives trading hours. Continuous trading in eligible stocks concludes at 3:15 PM, while equity derivatives continue until 3:40 PM. This timing difference can complicate the ability of traders to hedge their positions and manage risk effectively during the closing period.
Overall Business Growth Despite Challenges
Despite the challenges in equity derivatives, Groww reported growth in its overall business operations. The parent company recorded a consolidated net profit of Rs 725.6 crore in Q2 FY27, marking a 54% increase year-on-year. Revenue surged by 44%, reaching Rs 1,541 crore compared to Rs 1,071 crore in the same period last year.
The proportion of revenue from equity derivatives also saw a decrease, falling to 45% in the September quarter from approximately 57% the previous year.
Regulatory Responses and Future Outlook
Meanwhile, SEBI is considering modifications to the derivatives settlement mechanism to address concerns related to the Closing Auction System. The regulator is contemplating separating the settlement prices of derivatives from the prices determined by the closing auction, a strategy that could aid in normalising trading activity if established.
The recovery in derivatives revenue will largely depend on the final regulatory framework and how market participants adapt to these evolving changes.