Angel One drops 7% after NSE restriction from onboarding new sub-brokers for six months

Mumbai: Shares of stock broker Angel One dropped 7.16% to ₹1,586 on Monday, after the National Stock Exchange barred the firm from onboarding new authorised persons (APs) or sub-brokers for six months. Analysts said the impact of the order on the firm's business may not be significant, but the move could weigh on investor sentiment immediately.

On the BSE, 86,000 Angel One shares changed hands on Monday as against the two-week daily average of 36,000.

NSE said that the broking firm had allegedly failed to monitor the operations of its authorised persons, resulting in a violation of capital market regulations, according to Angel's disclosure to the stock exchanges. The exchange also imposed a penalty of ₹1.66 crore on the firm.


"Today there was a knee-jerk reaction in Angel One stock prices, but I believe this will get corrected a couple of days later unless there is a reoccurrence of such violation by the firm," said Arun Kejriwal, founder of Kejriwal Research and Investment Services.

Motilal Oswal Securities said authorised persons account for 21% of Angel's net broking revenue, while contributing 25% to the new customer acquisitions. The company's net broking income for FY23 was ₹1,439.9 crore.

"Incremental growth could be a challenge, especially customer acquisition," said Motilal Oswal's analysts in a note to clients.

"However, its existing battery of 21,000+ APs will continue to generate revenue and contribute to customer additions."

Angel said the company might appeal against the NSE order.