Whenever, a book closure or a record date is announced by a company, the exchange sets up a ‘No Delivery’ period for that security. During this period, trading is permitted in the security but the trades are settled only after the No-Delivery period is over. The start of No-Delivery period is the ex-date of the settlement. The settlement is clubbed with the settlement of the week whose pay-out date falls just after the end of the no-delivery period. This is done to ensure that investor’s entitlement for the corporate benefits is clearly determined. Generally No-delivery period is for one week.
No delivery period for the stocks under compulsory demat form was abolished by SEBI on December 6th 2000. This is to avoid price fluctuation during this period.
Consider this. During the no-delivery period, the sellers are not obliged to deliver the shares to the buyers. This typically results in increased trading activity in the stock during that period.Such an activity may result in the price going up or down, depending on the sentiment prevailing in the stock at that time.
If there are more buyers than sellers, for instance, the share price may move up. On the other hand, if sellers are more than buyers, the share price may come down.
Now, what happens when the no-delivery period is over? As sellers will be obliged to deliver the shares to the buyers, trading will return to the normal mode. In other words, price trends that prevailed during the no-delivery period will be reversed.
But how will the company transfer shares if the no-delivery period is done away with? To facilitate such transfers, SEBI has considered it fit to do away with the no-delivery period only for the stocks in the electronic (demat) form; for transfers in these stocks do not take much time.
No-delivery period for various scrips is indicated in the settlement calendar of BSE.
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Sathish Emmadi
Sathish Emmadi is a co-founder & editor at Lastbull.com. He is presently working in IT for one of the world’s top mutual fund companies. Handled multiple projects in BFSI (Banking,Financial Services and Insurance) domain. An Engineering Graduate from NITW.
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{ 5 comments… read them below or add one }
thanks for the info man.. actually i was searching for ND (as seen in NSEINDIA dot com and ended up here..
sir
how to find all the ex dividend date of share listed in nse
sir how to find all the Ex dividend dates of listed companies in NSE?
Hi Indu amd Madhava,
For the upcoming ex-dates, click on “Corporate Actions” under “Corporates Home” section of home page of NSE.
For historical Ex-Dates, BC Start Dates and Record Dates please go to the link
Home > Corporates > Corporate Information > Corporate Actions
and provide the date range and submit. It would give all companies corporate actions for the period specified.