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Mixed performance across parameters

F&O activity declines, cash rises; MF AUM crosses INR72t but inflows decline

* In May’25, total ADTO declined 5% MoM to INR349t after witnessing strong growth in the last 2 months. While cash activity witnessed significant growth (ADTO up 12% MoM) amid positive market sentiment, F&O activity declined slightly (ADTO down 5%).

* Retail participation continued to grow across cash and F&O segments, with retail cash ADTO surging 22% MoM to INR480b and retail futures and options premium ADTO rising 3% MoM to INR672b.

* The commodity market witnessed the second highest activity level after peaking last month, with volumes declining across commodities and ADTO to INR2.7t in May’25 (- 12% MoM).

* Demat additions inched up MoM to 2.2m in May’25 (2.0m in Apr’25). IPO activity has recovered after witnessing zero IPOs for the last two months (three IPOs in May’25).

* Mutual fund AUM grew ~4% MoM in May’25 to INR72.2t (up 23% YoY), achieving a new peak, with equity AUM growing 6% MoM to INR31.4t, despite a decline in equity inflows. SIP flows were largely stable and hit a new high of INR267b (INR266b in Apr’25).

* The capital market ecosystem witnessed a mixed performance, with some parameters such as option premium turnover, cash volumes and MF AUM maintaining growth momentum and others like F&O volumes, commodity volumes, and net MF inflows declining. We expect that a stable growth trajectory for volumes and rising retail participation should support the performance of market intermediaries. Strong SIP activity and recovery in flows, backed by industry efforts to spread awareness and enhance financial literacy, will promote a long-term investment perspective that bodes well for AMCs. Our top picks in the sector are: ANGELONE, HDFCAMC, and Nuvama.

Equity: Slowdown in F&O activity; cash activity sees surge

* Total ADTO declined 5% MoM in May’25 to INR349t, owing to 5% MoM fall in F&O ADTO to INR348t. However, cash ADTO grew 12% MoM to INR1.2t. The option premium ADTO inched up 3% MoM to INR755b.

* In the cash segment, NSE maintained a dominant position with a 94% market share in May’25. In F&O, BSE’s market share witnessed a slight MoM decline in terms of notional turnover to 36.7% (37.8% in Apr’25), while premium turnover market share was stable at 21.1% (21% in Apr’25)

Commodities: Volumes decline in May’25 after achieving peak last month

* Total volumes on MCX declined 12% MoM to INR59.9t in May’25 (up 46% YoY), with ADTO at ~INR2.7t – the second highest after the peak of INR3.2t achieved in Apr’25. Option volumes declined 12% MoM to INR51.5t, while futures volumes declined 8% MoM to INR8.4t.

* The decline in options ADTO was largely due to 11%/80%/17% MoM decline in gold/silver/crude oil ADTO. This was offset by 4% MoM growth in natural gas volumes. Option premium declined 14% MoM to INR825b, reflecting a premium to notional turnover ratio of 1.6%.

* In commodity futures, ADTO decline was owing to 21%/1%/37%/30%/1% MoM decline in copper/gold/silver/crude oil/natural gas futures ADTO.

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