New Delhi [India], June 26: India’s margin trading facility (MTF) market is growing and is growing at a fast pace. According to data, the country’s MTF order book reached ₹1.16 lakh crore as of December 2025, up from ₹24,920 crore in FY 23. Over time, quite a large number of investors have resorted to MTF to take larger positions in the market.
What Is MTF?
MTF is a facility that amplifies investors’ buying power by several notches. In MTF, investors can buy stocks by paying only a part or fraction of the total cost, while the remaining is funded by the broker. It is a kind of loan that the broker gives, for which one has to pay interest.
Suppose an investor wants to buy shares worth ₹1 lakh. However, he has only ₹20,000, The broker can fund the remaining ₹80,000 through MTF.
How Does MTF Work?
To obtain additional funds under MTF, investors need to:
- Select The Stocks
Investors need to choose the stocks they want to purchase through MTF. Not all stocks might be eligible for MTF, and the list differs across brokers.
- Place MTF Order
Post selection, investors can place the MTF order through their broker’s app or trading platform. Apps and trading platforms of all brokers allow this facility. The margin amount differs across stocks.
- Pay Interest
Investors availing of MTF need to pay interest on the amount taken. The interest rate differs across brokers and can also vary under different plans. One needs to pay interest until they close the position by selling the shares or converting them to cash delivery.
Investors need to closely monitor their MTF positions as a drop in securities’ value beyond a certain threshold, called minimum margin, may lead to a margin call.
If it happens, one needs to inject fresh funds to maintain the required margin. In the event of a failure to do so, the broker can liquidate the stocks to recover the amount.
Kotak Neo: Simplifying MTF
Like others, Kotak Neo offers MTF to investors through which one can enhance buying power. That said, Kotak Neo’s MTF offers various features that simplify the entire process.
- Check MTF Potential
Kotak Neo allows investors to find out the MTF potential through a simple online calculator. On the calculator:
- Investors need to enter the name of the stock they wish to purchase through MTF and its quantity
- The holding period i.e., the time until which they want to hold on to the stock on borrowed funds
- Market price, which is the stock’s real-time price on the exchange
- Target price, which is the price at which one wants to sell the stock
Based on these inputs, the calculator will show results that can help one understand the amount invested, the amount funded by Kotak Neo, brokerage and other charges, taxes and other costs, along with interest paid (the interest rate varies across Kotak Neo’s brokerage plans).
One can also compare the returns earned with MTF and without MTF for better decisions. The calculator helps remove ambiguity and helps one know what they are paying to avail the facility.
- Boost Buying Power By Up To 5X
Through Kotak Neo’s MTF, investors can amplify their buying power by up to 5X on over 1,500 stocks across market caps. It allows one to build diversified positions across stocks. Instead of concentrating on just a few stocks, one can spread exposure across different industry verticals.
The 5X buying power through MTF ensures one can capitalise on market opportunities without worrying about the lack of funds.
- Competitive Interest Rates
Interest rate is an essential lookout while availing MTF. It directly impacts the overall borrowing cost. Kotak Neo offers competitive interest rates on its MTF facility. A higher rate not only increases the overall cost but also eats into profits, especially if positions are held on for longer durations.
Kotak Neo charges only 9.69% per annum on its Trade Free Pro plan. The interest rate allows one to keep a tight lid on the overall cost to avail the facility.
- MTF Monthly Picks Backed By Research Team
For investors willing to take larger positions, via MTF, on stocks likely to outperform, Kotak Neo offers MTF Monthly Picks. Selected by a team of experts studying stock markets closely, the picks are not random choices.
Experts evaluate a company’s performance closely, look at the market trends and future growth potential before making a recommendation. The goal is to aid investors with better investment decisions.
Conclusion
While MTF can boost buying power, it is vital to use it with diligence. If chosen stocks fail to perform on expected lines, it can magnify losses. As MTF involves trading on borrowed funds, investors must deploy proper risk-management strategies to stay in control of their investments.
