Angel One's Second Act: Big Bets on Insurance, Wealth and Asset Management

For years Alok Gupta, a 56-year-old IT professional, has been investing in equities. After the pandemic he moved into derivatives lured by the carrot of high returns.

“I started trading in F&O [futures and options] about three years back. It is like an addiction. Initially, I made around ₹7–8 lakh, so I increased my investments to nearly ₹20–25 lakh. But after that, I lost a significant amount,” says Gupta.

Gupta is not alone. Lakhs of retail investors, many of them first-timers, have burnt their fingers trading in the high-risk derivatives market. Securities and Exchange Board of India (Sebi), the market regulator, decided to step in.

On October 1, 2024, Sebi’s first set of tightened derivatives rules came into effect, and the impact showed up almost at once. Volumes softened and earnings forecasts were trimmed.

For an industry used to unusually high retail activity since the pandemic, the slowdown was unfamiliar. The message was clear: the F&O wave had to ebb. Additional tightening proposals in the weeks that followed reinforced that this was the beginning of a regulatory reset, not a passing phase.

With a Sebi study finding that 93% of over 1 crore individual F&O traders incurred average losses of around ₹2 lakh per trader during the three years from 2021–22 to 2023–24, the regulator wanted guardrails that would temper excessive speculation and reduce systemic risk.

“Sebi’s regulatory changes have reshaped the broking industry, with brokers like Angel One, heavily dependent on F&O and retail clients, experiencing significant impacts,” says Vinit Bolinjkar, head of research at Ventura, a brokerage.

For Angel One, consolidated profit fell 50% year on year to ₹212 crore in the second quarter of 2025–26, while gross revenue dropped 21% to ₹1,204 crore. Gross client acquisition in the same period was down 41.9% and total orders fell 26.3%.

And yet, inside Angel One, nobody was pressing the panic button.

Weathering Cycles

Dinesh Thakkar, the firm’s chairman, has seen Indian markets evolve through several eras of change. He entered the business in the late 1980s using borrowed money, pioneered the use of walkie-talkies in broking offices, witnessed the Harshad Mehta and Ketan Parekh episodes up close and steered his firm through the 2008 global recession and multiple regulatory overhauls.

“Immediate reactions from the industry are always emotional, fear of losing revenue in the next quarter,” Thakkar says. “But historically, every regulatory change has helped the market grow stronger.”

He doesn’t see the F&O norms tightening as a threat. “They [Sebi] want a balance between trading and investing. Trading is a zero-sum game. One half has to lose, so the other half can win. And who loses? Those new to the market. Their [Sebi’s] job is to reduce systemic risk and increase long-term participation.”

Sebi’s directives exposed a structural vulnerability facing every derivatives-heavy broker: What happens when F&O slows? For Angel One, which had already begun diversifying into wealth management and credit lending, the tightening put that strategy to an immediate test.

Bolinjkar says that the loss of experienced F&O traders and the compressed revenue made it harder for Angel One to recover fully, even as new client additions continue, highlighting the need for business model diversification to withstand future regulatory challenges.

The Digital Turn

The roots of Angel One’s second act lie further back. In 2018, it shut down its physical branch network entirely and shifted to a fully digital operating model. The decision stripped away fixed costs, forced rethink of customer acquisition and service, and made the business software dependent, years before the pandemic made such models mainstream.

“It was a huge risk,” Thakkar recalls. “Digital companies were bleeding but our calculations showed we wouldn’t bleed for more than one or two quarters.” The bet paid off. After acquiring about 15 lakh customers over two decades, Angel One added nearly 18 lakh clients in the year it went fully digital.

That move set the stage for the next phase. In March 2025, Angel One brought in Ambarish Kenghe as group chief executive to accelerate a broader financial-services buildout. His arrival coincided with regulatory churn, but his mandate was larger.

“I wouldn’t call it a pivot. Pivots generally mean a change in your direction. We’re broadening our horizons. That is an important distinction,” says Kenghe.

His explanation is simple: users may not come with a single-product intent. Trading may be the entry point, but insurance, systematic investment plans, wealth management and credit naturally follow.

Still, he draws clear lines.

Angel One decided against entering unified payments interface and ruled out international expansion for now. It is focused on businesses it has the resources for and that can be sustainable.

The New Engines

Over the past two years, the company has added several financial services designed to deepen engagement beyond trading. Wealth management, launched in 2023–24, has scaled past ₹6,000 crore in assets under management, using a hybrid model with over 200 relationship managers. Credit distribution nearly doubled quarter on quarter to about ₹460 crore in the second quarter of 2025–26. The company’s asset management vertical has crossed over 1 lakh folios across nearly 15,700 PINs. In insurance, the company has entered into a joint venture with Singapore’s LivWell to build a tech-led life-insurance platform.

“AMC [asset management company] and insurance take longer to give returns but sentimentally positive from a shareholders’ perspective. Wealth and credit could provide the necessary cash flows much faster,” says Ambareesh Baliga, an independent market analyst.

None of these businesses are yet large enough to materially alter the revenue mix. What they do change is the nature of engagement. Broking brings users in; wealth, credit, AMC and insurance are designed to keep them longer, shifting behaviour from bursts of activity to recurring financial habits.

“Short term doesn’t worry us at all. Revenues will go up and down with volumes and macro factors. We’re not panicking or accelerating credit or insurance just because volumes dipped,” says Kenghe.

JM Financials, an investment bank, in a September 2025 report noted that the company’s profit after tax is expected to decline by 15% in 2025–26 over 2024–25, before it recovers from 2026-27 onwards.

The Competitive Divide

Angel One’s diversification push is unfolding in a crowded and competitive landscape. According to JM Financials, in 2023–24, Angel One had the lowest revenue per client among major brokers at ₹4,628, compared with ₹25,393 at Motilal Oswal Financial Services, ₹10,082 at ICICI Securities and ₹27,063 at IIFL Capital Services. The gap underscores both vulnerability and opportunity.

“As the company expands its product offerings and diversifies its revenue streams, it stands a good chance to gain incremental wallet share of the customer,” JM Financial said, while cautioning that execution will be critical.

“Ability to manage the new offerings is key for the company, lest it give up its gains in diversifying beyond the core business,” it added.

Meanwhile, Zerodha has built a more diversified revenue base, supported by margin-trading facility and algorithmic trading infrastructure that generate steadier, recurring income. Groww has built a strong buffer in its mutual-fund ecosystem and growing interest income.

While fewer than 5% of its customers trade only F&O, derivatives transactions generate significantly higher revenue per trade than cash equities or mutual funds. This leaves earnings sensitive to changes in trading behaviour. The funnel, however, remains strong. Angel One added around 1.7mn clients in the second quarter of 2025–26, the highest quarterly addition among brokers.

The strategic question now is not whether Angel One can attract users. It is whether the company can deepen engagement fast enough through wealth, credit, asset management and insurance to reduce its reliance on trading velocity alone.

The Execution Hurdle

Angel One is attempting to run multiple businesses in parallel through a single app. That complexity is easy to underestimate. Technology, particularly artificial intelligence (AI), has become central to managing that complexity. Angel One’s in-house chatbot, Ask Angel, now resolves the bulk of customer queries without escalation and has sharply reduced resolution times. AI is also being used to automate workflows and personalise engagements.

Thakkar, who has watched multiple technology cycles come and go, views AI less as a replacement for people and more as a way to scale empathy. Human agents, he argues, are constrained by time and bandwidth. AI systems can absorb context, ask follow-up questions and continue conversations across days.

Analysts flag additional risks: further regulatory tightening, rising capital intensity as financing and insurance scale up, cybersecurity demands and the challenge of integrating new services without cluttering the user experience. JM Financial has noted that as Angel One integrates newer offerings onto its app, there is a danger that complexity could dilute the user experience and lead to client drop-offs.

Besides, continued weakness in industry trading volumes could slow revenue growth even if market share holds. And as the company consumes more capital to build new verticals, returns may moderate before the strategy fully matures.

The Next Wave

The broking industry is entering a more disciplined phase. Retail participation will continue, but with lower velocity and tighter guardrails. For Angel One, that environment sharpens the stakes. Near-term earnings may remain volatile. The long-term outcome will depend on whether wealth, credit and AMC can scale fast enough to rebalance the business.

Thakkar brings a long-cycle perspective shaped by repeated regulatory resets. Kenghe brings a product-led, technology-first approach to building financial services around user behaviour.

If Angel One succeeds in its second act, it won’t be because it escaped the slowdown but because it used it to build something sturdier before the next wave arrives.