Current Nifty 50 constituents will move to T+1 Settlement Cycle in last batch w.e.f Jan 27, 2023: Edelweiss Alternative Research

The Securities Exchange Board of India (SEBI) on Sept 07, 2021, permitted Stock exchanges to introduce T+1 settlement cycle from January 01, 2022 on any of the securities available in the equity segment. 

Market Infrastructure Institutions "MIIs" (Stock Exchanges, Clearing Corporations and Depositories) have finalized the roadmap for the implementation of T+1 settlement cycle.

The T+1 settlement cycle will be implemented in a phased manner and the first list of securities with T+1 settlement cycle will begin from trade date starting from February 25, 2022.

Edelweiss Alternative Research has analysed the list of stocks which will be part of T+1 settlement cycle and going by the understanding of methodology the key stocks (NSE and BSE 500 constituents) will be part of T+1 Settlement cycle only after end of Nov 2022.

As  per the calculations, the first constituents from NSE or BSE 500 to move from T+2 (currently) to T+1 Settlement cycle will be from Nov 25, 2022, says Edelweiss Alternative Research.

"While all the current Nifty 50 constituents will only move to T+1 cycle in the last batch (w.e.f Jan 27, 2023). Thus the T+1 Settlement will be a gradual process (mainly lower to higher market capitalisation) and because of the adoption of new settlement cycle, we expect no near term impact," Edelweiss Alternative Research said.

Securities such as Preference shares, Warrants, Right entitlements, Partly paid shares and securities issued under differential voting rights (DVR) will be transitioned to T+1 settlement along with the stock of parent company, Edelweiss Alternative Research report added.