Groww does not expect the Securities and Exchange Board of India's (SEBI) proposed changes to the Closing Auction Session (CAS) to trigger a sharp rebound in equity derivatives volumes. The company's base case is a return to more normal activity levels rather than a surge, even as the segment's contribution to overall income has fallen sharply.
Equity derivatives accounted for 44.8% of Groww's total income of around Rs 1,541 crore in Q2 FY27, down from 56.9% a year earlier. Revenue from the segment fell 14.3% quarter-on-quarter. The company attributed most of the sequential decline to the industry-wide adjustment after SEBI introduced CAS for F&O-eligible stocks from August 3, 2026.
The new mechanism replaced the earlier volume-weighted average price (VWAP) method with a closing auction, held roughly between 3:15 pm and 3:35 pm. This created a mismatch with derivatives trading hours, which run until 3:40 pm, and temporary price disparities between the cash reference price and the auction equilibrium, dampening volumes across brokers.
On the SEBI consultation paper that followed market feedback, Groww CFO Ishan Bansal told analysts: “Both the options that SEBI has given, more or less, are not going to impact derivatives as a segment, because the closing of derivative segment will either be like 100% based on VWAP, or we’ll have a weighted average… the large part of the weight will come from the VWAP piece compared to the CAS piece. And hence, our expectation is that it will go back to normal in some ways.”
Bansal was more measured when asked whether removing the CAS-related friction would produce a meaningful lift in volumes.