Understanding Securities Lending and Borrowing (SLB)

What is Securities lending and borrowing (SLB) ?

Securities lending and borrowing is scheme which helps to earn a small rental fees on the Ideal shares/stocks held in your demat account. While the Lender of the stock/share benefits by earning a small Income on the ideal shares.

The borrower of the stock/share uses the borrowed share for settlement of the shares short sold. Currently only stocks traded in futures and options are allowed for securities lending and borrowing scheme.

Features of Securities Lending and Borrowing (SLB)

• Retail Investors, Institutional Investors can lend and borrow securities through this scheme.
• Investors who are holding Ideal Shares in the demat account are eligible to lend the securities.
• Investors or Traders who have short sold the securities can borrow the securities through this mechanism.
• The maximum tenure a security can be lend and borrowed cannot be more than a period of 12 months.
• National Securities Clearing Corporation Limited guarantees the delivery of stocks after the rental period. So there is no risk of loosing the stock.
• Any Dividends, Stock Splits, Bonus shares are settled to the lender of the securities when the stock is returned back by the borrower.

Securities Lending

• Securities Lending and Borrowing (SLB) Scheme can be used by an Investor to make additional returns by lending his Ideal stock in his portfolio for a fees.
• There is no risk of loosing the stock as NSCCL guarantees the delivery of stocks after the lending period.

Securities are generally lent by Mutual Funds, Insurance Companies, HNI’S

Example: If an Investor has an 1000 shares of NTPC he can lend his shares by quoting a lending of Rs 10 per share for one month then the borrower pays the lender Rs 10000 for that month. And returns back the stock after the lending period.

Securities Borrowing

A Stock is borrowed by an Investor when there is an Arbitrage opportunity present between two exchanges or If he had short sold a stock to cover short positions an Investor borrows and for different other strategies.

Example: If a stock in Spot market is trading at Rs 50 and in futures market if the stock is trading at Rs 52 here there is an arbitrage opportunity to buy the stock in spot market and sell the stock in futures market. Instead of buying the stock the Investor can borrow the security and deliver the same.

Corporate Actions

Corporate Actions other than Stock Splits and dividend the transaction is foreclosed 2 days prior to the ex-date. In such cases the rental fee is calculated on pro-rata basis and settled for the no of days borrowed.

Incase of dividend the borrower repays the lender the dividend paid by the security at the time of book closure or record date.

Incase of Stock Splits the stock is delivered to the lender with all the shares borrowed and the stocks split received.

List of Stocks Allowed for Lending and Borrowing

1 ACC LIMITED
2 ADANI ENTERPRISES LIMITED
3 ADANI PORT & SEZ LTD
4 ADANI POWER LTD
5 AJANTA PHARMA LIMITED
6 ALLAHABAD BANK
7 AMARA RAJA BATTERIES LTD.
8 AMBUJA CEMENTS LTD
9 ANDHRA BANK
10 APOLLO HOSPITALS ENTER. L
11 APOLLO TYRES LTD
12 ARVIND LIMITED
13 ASHOK LEYLAND LTD
14 ASIAN PAINTS LIMITED
15 AUROBINDO PHARMA LTD
16 AXIS BANK LIMITED
17 BAJAJ AUTO LIMITED
18 BAJAJ FINANCE LIMITED
19 BAJAJ FINSERV LIMITED
20 BALKRISHNA INDUSTRIES LIMITED
21 BALRAMPUR CHINI MILLS LIMITED
22 BANK OF BARODA
23 BANK OF INDIA
24 BATA INDIA LTD
25 BEML LIMITED
26 BERGER PAINTS (I) LIMITED
27 BHARAT ELECTRONICS LTD
28 BHARAT FIN INCLUSION LTD
29 BHARAT FORGE LTD
30 BHARAT PETROLEUM CORP LT
31 BHARTI AIRTEL LIMITED
32 BHARTI INFRATEL LTD.
33 BHEL
34 BIOCON LIMITED.
35 BOSCH LIMITED
36 BRITANNIA INDUSTRIES LTD
37 CADILA HEALTHCARE LIMITED
38 CAN FIN HOMES LIMITED
39 CANARA BANK
40 CAPITAL FIRST LIMITED
41 CASTROL INDIA LIMITED
42 CEAT LIMITED
43 CENTURY TEXTILES LTD
44 CESC LTD
45 CG POWER AND INDUSTRIAL SOLUTIONS LIMITED
46 CHENNAI PETROLEUM CORPORATION LIMITED
47 CHOLAMANDALAM INVESTMENT AND FINANCE COMPANY LIMITED
48 CIPLA LTD
49 COAL INDIA LTD
50 COLGATE PALMOLIVE LTD.
51 CONTAINER CORP OF IND LTD
52 CUMMINS INDIA LTD
53 DABUR INDIA LTD
54 DALMIA BHARAT LIMITED
55 DCB BANK LIMITED
56 DEWAN HOUSING FIN CORP LT
57 DISH TV INDIA LTD.
58 DIVI’S LABORATORIES LTD
59 DLF LIMITED
60 DR. REDDY’S LABORATORIES
61 EICHER MOTORS LTD
62 ENGINEERS INDIA LTD
63 EQUITAS HOLDINGS LIMITED
64 ESCORTS LIMITED
65 EXIDE INDUSTRIES LTD
66 FEDERAL BANK LTD
67 GAIL (INDIA) LTD
68 GLENMARK PHARMACEUTICALS
69 GMR INFRASTRUCTURE LTD.
70 GODFREY PHILLIPS INDIA LIMITED
71 GODREJ CONSUMER PRODUCTS
72 GODREJ INDUSTRIES LTD
73 GRANULES INDIA LIMITED
74 GRASIM INDUSTRIES LTD
75 GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED
76 HAVELLS INDIA LIMITED
77 HCL TECHNOLOGIES LTD
78 HDFC BANK LTD
79 HDFC LTD
80 HERO MOTOCORP LIMITED
81 HEXAWARE TECHNOLOGIES LTD
82 HINDALCO INDUSTRIES LTD
83 HINDUSTAN CONSTRUCTION COMPANY LIMITED
84 HINDUSTAN PETROLEUM CORP
85 HINDUSTAN UNILEVER LTD.
86 HINDUSTAN ZINC LIMITED
87 ICICI BANK LTD.
88 ICICI PRUDENTIAL LIFE INSURANCE COMPANY LIMITED
89 IDBI BANK LIMITED
90 IDEA CELLULAR LIMITED
91 IDFC BANK LIMITED
92 IDFC LIMITED
93 IFCI LTD
94 INDIABULLS HSG FIN LTD
95 INDIAN BANK
96 INDIAN OIL CORP LTD
97 INDRAPRASTHA GAS LTD
98 INDUSIND BANK LIMITED
99 INFIBEAM INCORPORATION LIMITED
100 INFOSYS LIMITED
101 INTERGLOBE AVIATION LIMITED
102 IRB INFRA DEV LTD.
103 ITC LTD
104 JAIN IRRIGATION SYSTEMS
105 JAIPRAKASH ASSOCIATES LTD
106 JET AIRWAYS (INDIA) LTD.
107 JINDAL STEEL & POWER LTD
108 JSW STEEL LIMITED
109 JUBILANT FOODWORKS LTD
110 JUSTDIAL LTD.
111 KAJARIA CERAMICS LIMITED
112 KARNATAKA BANK LIMITED
113 KAVERI SEED CO. LTD.
114 KOTAK MAHINDRA BANK LTD
115 KPIT TECHNOLOGIES LTD
116 L&T FINANCE HOLDINGS LTD
117 LARSEN & TOUBRO LTD.
118 LIC HOUSING FINANCE LTD
119 LUPIN LIMITED
120 M&M FIN. SERVICES LTD
121 MAHANAGAR GAS LIMITED
122 MAHINDRA & MAHINDRA LTD
123 MANAPPURAM FINANCE LIMITED
124 MANGALORE REFINERY AND PETROCHEMICALS LIMITED
125 MARICO LIMITED
126 MARUTI SUZUKI INDIA LTD.
127 MAX FINANCIAL SERVICES LIMITED
128 MINDTREE LIMITED
129 MOTHERSON SUMI SYSTEMS LT
130 MRF LTD
131 MULTI COMMODITY EXCHANGE OF INDIA LIMITED
132 MUTHOOT FINANCE LIMITED
133 NATIONAL ALUMINIUM COMPANY LIMITED
134 NBCC (INDIA) LIMITED
135 NCC LIMITED
136 NESTLE INDIA LIMITED
137 NHPC LTD
138 NIIT TECHNOLOGIES LTD
139 NMDC LTD.
140 NTPC LTD
141 OIL AND NATURAL GAS CORP.
142 OIL INDIA LTD
143 ORACLE FIN SERV SOFT LTD.
144 ORIENTAL BANK OF COMMERCE
145 PAGE INDUSTRIES LTD
146 PC JEWELLER LTD
147 PETRONET LNG LIMITED
148 PIDILITE INDUSTRIES LTD
149 PIRAMAL ENTERPRISES LIMITED
150 POWER FIN CORP LTD.
151 POWER GRID CORP. LTD.
152 PTC INDIA LIMITED
153 PUNJAB NATIONAL BANK
154 PVR LIMITED
155 RAYMOND LIMITED
156 RBL BANK LIMITED
157 RELIANCE CAPITAL LTD
158 RELIANCE COMMUNICATIONS L
159 RELIANCE INDUSTRIES LTD
160 RELIANCE INFRASTRUCTU LTD
161 RELIANCE POWER LTD.
162 REPCO HOME FINANCE LIMITED
163 RURAL ELEC CORP. LTD.
164 SHREE CEMENTS LIMITED
165 SHRIRAM TRANSPORT FIN CO.
166 SIEMENS LTD
167 SREI INFRASTRUCTURE FINANCE LIMITED
168 SRF LTD
169 STATE BANK OF INDIA
170 STEEL AUTHORITY OF INDIA
171 STRIDES SHASUN LIMITED
172 SUN PHARMACEUTICALS IND.
173 SUN TV NETWORK LIMITED
174 SUZLON ENERGY LIMITED
175 SYNDICATE BANK
176 TATA CHEMICALS LTD
177 TATA COMMUNICATIONS LTD
178 TATA CONSULTANCY SERV LT
179 TATA ELXSI LIMITED
180 TATA GLOBAL BEVERAGES LTD
181 TATA MOTORS DVR ‘A’ ORD
182 TATA MOTORS LIMITED
183 TATA POWER CO LTD
184 TATA STEEL LIMITED
185 TECH MAHINDRA LIMITED
186 THE INDIA CEMENTS LIMITED
187 THE RAMCO CEMENTS LIMITED
188 THE SOUTH INDIAN BANK LTD
189 TITAN COMPANY LIMITED
190 TORRENT PHARMACEUTICALS L
191 TORRENT POWER LTD
192 TV18 BROADCAST LIMITED
193 TVS MOTOR COMPANY LTD
194 UJJIVAN FINANCIAL SERVICES LIMITED
195 ULTRATECH CEMENT LIMITED
196 UNION BANK OF INDIA
197 UNITED BREWERIES LTD
198 UNITED SPIRITS LIMITED
199 UPL LIMITED
200 VEDANTA LIMITED
201 V-GUARD INDUSTRIES LIMITED
202 VOLTAS LTD
203 WIPRO LTD
204 WOCKHARDT LIMITED
205 YES BANK LIMITED
206 ZEE ENTERTAINMENT ENT LTD

Holding these stocks Ideal in your demat account. Contact us get attractive returns.