Amid the ongoing correction in the Indian equities market, investment technology unicorn Zerodha saw a decline in its active user base, which fell to 79.57 lakh at the end of February from 80.82 lakh as of January 31, according to data from the National Stock Exchange (NSE).
The negative sentiment in the market also impacted other leading brokerages. Market leader Groww witnessed a decline of approximately 2 lakh active users, with its user base falling to 1.30 crore in February from 1.32 crore at the end of January 2025.
This downward trend was not limited to just Zerodha and Groww, as almost all brokerages faced a similar impact. The cumulative number of active users across all trading platforms saw a significant decline, dropping to 4.89 crore in February from 5.02 crore in January.
Industry experts attribute this decline to the prevailing bearish sentiment in the equity markets, driven by global economic uncertainties, high volatility, and profit booking by investors. Retail participation in the stock market tends to shrink during corrections, as cautious investors either reduce their trading activities or exit the market temporarily.
Despite this short-term dip in active users, fintech firms remain optimistic about long-term retail participation in Indian equities. The continued digital transformation in trading, increasing financial literacy, and the growing adoption of systematic investment plans (SIPs) are expected to bring stability and sustained engagement from investors.
Market analysts suggest that while a correction phase may temporarily dampen activity, it presents an opportunity for long-term investors to accumulate quality stocks at lower valuations. Whether retail traders return in large numbers will depend on the overall market recovery and investor confidence in the coming months.