Not received interest on NCD even though I sold just one day before record date!


#1

I sold a few units of IFCI NJ NCDs on the 25th of Jan, the record date for interest payment was 28th. 26th & 27th were holidays. Hence I sold just 1 day prior to record date. But I have not received the interest from IFCI, who told me that my name was not in their records on 28th evening.
I thought settlement was T+2, and indeed when I buy NCDs from Zerodha, I get them in my demat account on T+2. However, while selling, it seems like they debit from demat account on T+1! So does the buyer get the interest, or the seller, or nobody (or Zerodha)?
Mind you, the price of the NCD got adjusted downwards the day I sold, so I am losing out on my trade.
Also, just to take an almost exact example, the prices of HUDCO tax free bonds N2 & N3 have adjusted downwards today (15th Feb), when their record date is 18th (16th & 17th being holidays). That means the sellers expect to get interest while the buyers don’t expect. But why did I not get the interest for my IFCI NCDs? Is it Zerodha’s fault?


#2

@Kunal_Kothari u must get interest on your sale of 25 th January . the buyer bought without interest means the seller will get it and it is as simple as this.
buyer account can not be credited before due date of settlement hence no question of he/she getting interest. there is no concept that nobody gets interest but since the shares were removed from your demat as cum interest though sold ex interest ,the same were in the brokers account when interest payment triggered hence the broker shall get interest on your behalf.


#3

You sold one day before the record date, so you would have received the interest to your trading account. Check your ledger.


#4

Thanks a lot for the reply guys!
A Zerodha representative explained to me that they will receive interest on my behalf, as all brokers prudently debit the sellers’ demat account on T+1. The interest/dividends received by them (Zerodha) would be credited to the sellers’ trading account or ledger on a weekly basis. Hence, I should get the interest shortly.


#5

Update: I got the interest from Zerodha, the only thing is that I got a little less, since Zerodha was paid interest on my behalf according to the corporate coupon rate, which was 10 basis points lower than retail investors rate.


#6

Thanks for the update.