About state development bond issue (SDL)

Typically, such GSEC and SDL bonds
will NOT have any liquidity in the secondary markets (NSE, BSE).

One usually holds them till maturity
and receives the entire face-value of the bond upon maturity,
earning interest on it for the duration one holds the bond.

Interest (every 6 months) and principal (upon maturity) are received automatically in the bank account linked to the demat account holding the security.


To get rid of such illiquid bonds in a hurry on the secondary markets (NSE/BSE)
the strategy is to basically offer all the bonds one is holding
and sell-off whatever quantity (even part of one’s entire holdings) one can
at progressively lower rates (even lower circuit limits),
as circuit-limits reduce further each day after a trade occurs at a lower price.

For more details, checkout this topic-thread where this scenario was recently discussed.