Heard on the street

Housing Development & Infrastructure (HDIL) missed out on the blistering rally in the real estate shares on Monday. The stock ended at Rs 138.40, down 4% over the previous close. In fact, HDIL was the only scrip on BSE Realty to have closed in the red. This is all the more surprising, considering there was a huge auction in the stock on NSE on Monday. When sellers of a stock fail to deliver the shares, their positions are auctioned on the day following the normal settlement. In case of HDIL, there were undelivered positions of 2,68,601 shares, according to NSE brokers.

Of this, offers were received for 1,24,683 shares. Surprisingly, said brokers, no offers were received for the remaining 1.44 lakh shares. As per regulations, these positions are then closed out. This means that the buyer of the undelivered shares will be offered monetary compensation, which will be debited from the account of the broker who failed to deliver the shares. The close out price will be the highest price recorded in that scrip on the exchange in the settlement, in which the concerned contract was entered into and up to the date of auction/close out or 20% above the official closing price on the exchange on the day on which auction offers are called for, whichever is higher. There was speculation over the price at which the HDIL short positions were closed out. When contacted for details of the close out price, an NSE official said the information is not made public. Speculation is that the short position in the stock could have resulted due to Sebi curbs on the overseas/lending borrowing of Indian equities by FIIs.

(Contributed by Apurv Gupta)