Motilal Oswal Shares Dip Nearly 8% After SEBI’s Draft on Lower Brokerage Fees

Shares of Motilal Oswal Financial Services Ltd. declined nearly 8% on Wednesday, October 29, after the market regulator Securities and Exchange Board of India (SEBI) issued a draft proposal to revise brokerage fee limits paid by mutual funds. 

The move triggered cautious sentiment among investors, reflecting concerns about potential pressure on earnings within the financial services sector.

SEBI’s Proposal on Brokerage Fee Caps

According to the draft regulations released on Tuesday evening, SEBI proposed a reduction in the brokerage fees for cash market transactions to 2 basis points, compared with 12 basis points earlier. For the derivatives market, the proposed fee would be lowered to one basis point from the existing 5 basis points. 

This potential change aims to streamline transaction costs in mutual fund investments but has raised questions about its short-term impact on brokerages’ revenue. Market participants have noted that smaller and mid-sized brokers could feel a sharper impact if these norms are implemented. Industry voices have suggested that a free-market approach might be more suitable to balance competitiveness and sustainability.

Market Reaction to SEBI’s Draft

The news prompted a noticeable reaction in the stock market, with Motilal Oswal Financial Services share price dropping by 7.43% to ₹1,010 as of 2:14 PM on October 29. The company’s market capitalisation was reported at ₹60,624 crore, as investors evaluated the broader implications of SEBI’s proposal.

Despite the decline, Motilal Oswal Financial Services share price remains up over 10% in the past month and has turned positive on a year-to-date basis, indicating resilient investor confidence in the company’s overall business model.

Financial Overview and Market Position

Over the past year, Motilal Oswal Financial Services share price has ranged between ₹1,097 and ₹488, highlighting its sensitivity to market trends and policy developments. The firm continues to maintain strong financial ratios, with a P/E of 21.8, a return on capital employed (ROCE) of 18.7%, and a return on equity (ROE) of 25.2%.

The company operates across diversified verticals including capital markets, asset and wealth management, and housing finance. While the SEBI draft proposal may pose short-term challenges, the company’s diversified structure helps balance the effects of regulatory shifts.

Read More:Motilal Oswal Financial Services To Sign Agreement To Invest ₹110 Crore In IL Jin Electronics

Conclusion

The decline in Motilal Oswal Financial Services share price on October 29 reflects immediate investor caution following SEBI’s draft on brokerage fee reduction. As regulatory discussions continue, the market will closely watch how the final framework evolves and how financial service providers adapt to maintain profitability amid changing dynamics.

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