Zerodha MTF Settlement

How MTF stocks are sold

From WebNotes, a public knowledge base. Last updated . Reading time ~2 min.

When you sell MTF-bought stocks, the sale proceeds settle in a specific order:

  1. Loan portion (broker-funded amount) repaid first.
  2. Accrued interest deducted.
  3. Brokerage and charges deducted.
  4. Excess credits to your trading account.

Example

You bought Rs 5 lakh of XYZ via MTF (50% MTF = Rs 2.5 lakh borrowed). You hold for 60 days (interest Rs 4,930 at 12% p.a.). XYZ rises to Rs 5.5 lakh; you sell.

  • Sale proceeds: Rs 5,50,000.
  • Repay MTF loan: Rs 2,50,000.
  • Pay accrued interest: Rs 4,930.
  • Other charges (STT, etc.): ~Rs 200.
  • Your net credit: Rs 2,94,870.

Of which, your original Rs 2.5 lakh contribution + Rs 44,870 gain.

Settlement timing

Standard T+1 (or T+0 if eligible). The loan repayment is automatic at settlement; you don’t need to take any action beyond placing the sell.

See also

External references

References

  1. Zerodha, MTF settlement flow, support.zerodha.com.
  2. SEBI, MTF framework, sebi.gov.in.

Related articles

  • Brokerage and MTF costs

    Total cost of an MTF position: brokerage + interest + other charges. Helps compare MTF return potential vs total cost.

  • MTF FAQs

    Frequently asked questions about Margin Trading Facility (MTF) at Indian brokers: what it is, who's eligible, interest, square-off, …

  • MTF charges on Zerodha

    Charges associated with MTF on Zerodha: interest, brokerage, pledge fees, and overall cost breakdown. Helps compare with alternatives.

  • MTF eligible stocks on Zerodha

    Which stocks are eligible for MTF (Margin Trading Facility) on Zerodha. Covers the approved list, exclusions, and how to verify before …

  • MTF ledger entries

    How MTF transactions appear in the Zerodha Console ledger: buy, interest accrual, sell, interest payment. Explains the entries and …

  • MTF vs e-margin difference

    Difference between MTF (Margin Trading Facility) and e-margin (a historical / alternative leverage framework). Explains current relevance.

Reviewed and published by

WebNotes Editorial Team

The WebNotes Editorial Team covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

Last reviewed
Conflicts of interest
WebNotes is independent. No relationship with any broker, registrar or bank named in this article.