India high-frequency trading servers market is projected to witness a CAGR of 7.08% during the forecast period FY2025-FY2032, growing from USD 43.02 million in FY2024 to USD 74.36 million in FY2032. The high-frequency trading (HFT) server market is developing rapidly in the country, owing to increased liquidity in financial markets, driving the trend forward. This is because HFT companies are mainly involved in facilitating trade and attracting more investors to it. Another significant reason is technological changes, particularly related to low-latency trading systems and high-speed networks, which develop the efficiency of HFT strategies and are more attractive to traders. India’s overall regulatory environment is conducive to HFT firms. The increased number of retail investors and easy access to trading platforms has created an increased demand for more advanced solutions. Big data analytics enables HFT firms to make the right decisions and, thereby, optimize their trading. With the development of new financial products and a more integrated global market, HFT strategies are diversifying and becoming more complicated. Scalability and flexibility are further enhanced using cloud computing. Corporations benefit from high-level resources with small capital investments without worrying about maintaining the infrastructures as per their evolving needs. These factors thus form a competitive landscape, leading to continuous investments in high-performance servers and contributing to the healthy growth of the market.
High-frequency trading servers are highly specialized, high-performance computing systems that process an enormous number of orders at incredible speeds. Such HFT servers are designed to provide very low latency and seize small movements in the financial markets based on fast trades leveraging extensive algorithms and quantitative analysis. In May 2024, Wipro Limited, the largest global information technology, consulting, and business process services company, announced a collaboration with Microsoft to bring a set of cognitive assistants for financial services powered by generative AI. Through the characteristic use of GenAI features, these cognitive assistants will empower banking and financial professionals with deep market insights and timely, relevant information on investment products and investor behavior.
Increasing Market Liquidity to Drive Market Growth
A key driver for the growth of the HFT server market is increased liquidity. More participants are trading, whether retail or institutional investors, increasing the demand for rapid and efficient execution of trades. HFT firms improve liquidity by providing continuous buy and sell orders, thus stabilizing prices and reducing volatility. This dynamic environment requires high-performance servers with which HFT firms must invest to handle vast amounts of data and execute trades with minimal delay. When liquidity improves, it attracts more investors, which would set off a positive feedback loop, perpetuating trading volumes. This competition would compel the firms to refine their algorithms and technology by optimizing their technological capabilities to respond swiftly to the changes in markets. Consequently, the demand for high-end server solutions is bound to continue rising, which will drive further innovation and investment in the market. Increased market liquidity, in general, will make trading opportunities more fruitful and provide a much-needed foundation for growth in the HFT server market. From April 2022 to March 2023, 251.41 thousand new SIPs were registered, which surged to 428.09 thousand from FY2023-FY2024, marking a growth of approximately 70.3%. This significant increase indicates rising investor confidence in mutual funds driven by favorable market conditions and increased financial literacy.
Increased Participation from Institutional Investors to Boost Market Growth
Growth in India HFT servers is significantly fueled by increased participation from institutional investors. As more institutional funds, such as mutual funds, pension funds, and hedge funds, increase their participation, more capital is brought to the market along with more sophisticated trading strategies. Considering real-time execution and powerful analytics amplifying the imperative for low-latency trading solutions, high-frequency trading firms will have to spend their money in high-performance servers with a very short response time that enables them to process huge volumes of transactions quickly and efficiently. HFT firms work for institutional investors to support their trading strategies. Such companies apply algorithms that exploit fleeting market opportunities. Such cooperation boosts liquidity and stabilizes prices, which increases the rigidity of the trading environment. Institutional investors draw more retail traders and increase activities in the markets. As more institutions look for innovation to stay ahead of the competition in trading, the demand for sophisticated HFT infrastructure continues to grow. A two-way relationship occurs between investment by institutions and HFT server capability, fueling market growth and ensuring the coming of new technologies that will dynamically respond to changes in the market. In August 2024, the Indian stock markets reached a significant milestone as the total number of registered investors in the country surpassed 100 million, according to a report by the National Stock Exchange (NSE).
Equity Trading to Dominate Market Share
Equity trading is expected to hold the maximum share in the HFT server market in India going ahead, with the country growing in a fast-paced financial landscape. With higher participation from the retail end and with enhanced interest from institutional investors, equity markets are becoming vibrant and active. Such high trading activities generate enormous demand for advanced infrastructure for HFT when companies seek to capitalize on even small price movements and make trades without creating any perceivable latency. Record trading volumes on NSE and BSE have forced HFT companies to improve their technological thresholds to compete intensely in the market.
Moreover, digitalized equity trading platforms enable a broader spectrum of investors to reach out to equity markets, and hence, the need for advanced algorithms and low-latency servers is getting stringent. This promotes the innovation of trading strategies, and therefore, equity trading would be at the top of HFT activities in India, which would promote the growth of the server market in anticipation of emerging market demands. As of June 2024, the total number of demat accounts reached USD 1.95 million, with 42 lakh new accounts added in the month, reflecting an average monthly addition rate of 34 lakh so far in FY2025. In June 2024, Central Depository Services Ltd. (CDSL) continued to expand its market share regarding the total number of demat accounts.
West and Central to Dominate India High-Frequency Trading Servers Market Share
In the Indian high-frequency trading (HFT) server market, it is expected that the West and Central, especially Mumbai, will lead the way as the city houses India’s financial capital, consisting of the Bombay Stock Exchange and the National Stock Exchange, in its heart, making it the magnetic center of equity trading in India for HFT firms. The concentration of financial activities attracted institutional investors in search of efficient trading strategies and low-latency solutions. This kind of ecosystem encourages a collaborative interface among various technology providers, data analytics firms, and trading companies to innovate and develop high-performance advanced trading infrastructure. Mumbai additionally benefits from a skilled workforce, robust telecom infrastructure, and supportive regulation, which are critical ingredients for HFT. As the market continues to evolve, the West and Central have strategic advantages positioned to be the leaders of high-frequency trading, shifting trends in markets, and technological developments across the country. In September 2024, Oracle Financial Services Software Limited, a technology-based company, built new AI capabilities that will help customers in the sophisticated execution of tasks, automating workflows, and realizing greater efficiencies in the Oracle Fusion Cloud Applications Suite. New AI-driven features in the Oracle application suite will offer unparalleled levels of productivity in domains such as finance, supply chain, human resource, sales, marketing, and service.
Future Market Scenario (FY2025 – FY2032F)
- HFT services will see a vigorous demand triggered by escalating retail and institutional investor participation in trading.
- Implementation of AI and machine learning algorithms will create more complex trading strategies and predictive analytics, providing better decision-making tools for firms.
- Integrated Indian markets with global financial systems would give way to more international strategies by HFT firms, leading to greater market dynamism in the country.
Report Scope
“India High-Frequency Trading Servers Market Assessment, Opportunities and Forecast, FY2018-FY2032F”, is a comprehensive report by Markets and Data, providing in-depth analysis and qualitative and quantitative assessment of the current state of India high-frequency trading servers market, industry dynamics, and challenges. The report includes market size, segmental shares, growth trends, opportunities, and forecast between FY2025 and FY2032. Additionally, the report profiles the leading players in the industry, mentioning their respective market share, business models, competitive intelligence, etc.
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