The ban on badla and other deferral products from July 2 by the Securities and Exchange Board of India (Sebi) will have minimal impact on net outstanding positions built prior to March 15.
This has been indicated by the rising net outstandings built under the borrowing and lending security system (BLESS) after May 15.
Outstandings under BLESS after May 15 has gone up from Rs 780 crore on May 18 to Rs 874 crore on June 3.
Under the automated lending and borrowing mechanism (ALBM), net outstandings moved up from Rs 602.21 crore on May 16 to Rs 724.41 crore on May 30.
The Sensex during the period declined by 195 points or 5.33 per cent, while the S&P CNX Nifty moved up marginally, up 22 points or 2.3 per cent.
As per the Sebi directive, deferred positions built after May 15 will have to be liquidated by July 2. But such position built prior to May 15 will have to be liquidated during the transition period between July 2 and September 3.
The rise in net outstandings in BLESS and ALBM thus indicates that big operators who have taken positions prior to May 15, continue to hold it till today.
The rise in badla rates from an average of 8.5 per cent on May 12 to 14.3 per cent on June 1 is also an indication.
Market sources said that the rise in badla rates and outstanding position has been on account of operators taking fresh position.
The big operators feel that they would take the opportunity to carry forward the old position after July 2 as they will get another five weeks to square off the position.
Meanwhile, they feel that the Sebi will come out with alternative mechanism and the outstanding position carried forward till September 3 could be shifted to alternative mechanism.
However, the operators have to square off the long position in scrips in which the no-delivery (ND) period comes before the Sebi deadline of September 3.
For example, the outstandings in Reliance Industries, Reliance Petro, Infosys Technologies and Glaxo can be carried forward till September 3 as their ND period was over before May 15.
The long position in operator-driven stocks such as Satyam Computers, ACC, Sterlite Optical, Himachal Futuristic, Global Tele-Systems, Larsen & Toubro, India Cement, Wipro, SSI and Zee Telefilms remains more or less higher than that on May 15.
However, the position in L&T, Wipro, ACC and Satyam Computers will automatically be squared off as their no delivery period fell before September 3.
