Zerodha's Nithin Kamath Warns of Risks in Margin Trading Exposure

Zerodha CEO Nithin Kamath has flagged the record surge in Margin Trading Facility (MTF) exposure as a significant risk, citing the recent market meltdown in Korea as a cautionary tale.

Kamath warned that the 'one-way rally' in Indian markets is encouraging retail investors to take on excessive leverage, which could lead to severe liquidity issues during a downturn.

The broker is urging regulators to monitor MTF growth closely, as the current build-up of leverage mirrors patterns seen in markets that experienced rapid, unsustainable corrections.