How to sell State Development loans (SDL)

Bonds
1

Hi Team,

I am in urgent need of money but I am not able to sell SDL (state development loan). Please guide me how to sell them.

it’s asking me to place limit order but I don’t know the price of it.
Also, when I simply give 100, the order is OPEN and not executed.

It’s a bit urgent, please help.

2

The liquidity for SDLs is not that much in the secondary market, as in these aren’t traded much on the exchanges so you won’t be able to exit your position quickly.

Since these are illiquid, you won’t be able to place a market order. The limit order you place will remain open until it is executed, there also have to be buyers to buy from you. For more details, you can check the market depth window.

1 Like
3

@sujatha_konakalla To sell-off an illiquid security ASAP,
basically after reviewing Buy/Bid orders in the market depth
you can place (or modify) your Ask/Sell order at reduced price until it matches a Buy/Bid order that even partially fills your Ask/Sell order.

For example -
Even if you want to sell 1000 units at Rs.100 each,
an order may want to buy only 100 units at Rs.95 each.

If you were to now update your Ask/Sell order to Rs.95…

…what happens next is that,

  • you are able to get Rs.9500 for 100 units immediately.
  • when an SDL is traded at a lower price (Rs.95 in the above example),
    on the next day the lower-circuit limit of the security is further reduced.
    This enables you (and someone else) to trade the remaining units at further lower prices.

So, if you have 1000 units of some illiquid security like an SDL,
it might get sold something like this

  • Day1 - 100 units sold at Rs. 95 each (Rs.9500)
  • Day2 - 200 units sold at Rs. 91 each (Rs.18200)
  • Day3 - 200 units sold at Rs. 86.50 each (Rs.17300)
  • Day4 - 500 units sold at Rs. 83 each (Rs.41500)

i.e. net 1000 units sold at a total of Rs.86,500.

I have observed such pattern of trades for most of the illiquid securities like SDLs traded on BSE/NSE.
This is the Liquidity risk one assumes when one invests in such illiquid securities that are not traded frequently in large quantities.

To be clear, with the above approach you may not be able to recover the entire amount you paid to purchase the SDL. However you might be able to recover anywhere from 80-95% by selling the illiquid securities at a discount. (assuming someone is even willing to buy those on BSE/NSE).

Also, an alternative option to consider
would be to first try and sell-off any other frequently traded liquid securities you may own.

1 Like
4

Can you share the order book for the said SDL?

6

Hello, were you able to sell you SDL , actually now i am in your spot, please let me know if you have figured it out

7

Help, Hello sujata please confirm me if you were able to sell the SDL,

8

Hey Everyone, I’m facing similar issue. Invested in a SDL Bond but there’s no buyer for this instrument. Have been trying since last 3 months but unable to exit. Is there any possible way to exit this instrument, I’ll be happy even if I recover 50% of the total amount. They don’t even credit the intrest amount as they should and I really have no clue about it.

9

Which SDL is it?

Am sure you will be able to sell it on NSE/BSE at such lower face-value. Just that you will have to do that incrementally at progressively lower-circuit limits for a couple of days as summarised in the post above.

Source: I see this occur on NSE/BSE all the time.

10

Hi I want to sell my [745AP33-SG] SDL worth 50k for 45k, is there anybody intrested to buy.