Imagine a user buys a government bond just 1 day before the coupon payment date. Since, T+2 settlement is followed, the bond would not have been delivered to the user’s DEMAT account.
In such a scenario, who receives the coupon payment? Is it the buyer, seller or the broker (Zerodha)? If it’s the broker, does Zerodha pass that through to the buyer?
The settlement now happens on T+1 day even for bonds. So, if you buy the bonds before the interest payment date, you will be eligible to get the interest payment.
@ShubhS9 The settlement is T+1 but what you state doesn’t appear to be true.
I did a small experiment of buying 1 unit a day before coupon payment date. Bought on 29th Apr with coupon date as 30th April and didn’t receive the coupon payout.
Are you trying to get the interest and cash out?
@tallerballer I’m trying to understand the process so as to correctly price the bond because the current price has an accrued interest component.