@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.