How to authorise a pledge request on CDSL for Zerodha

Pledging lets you put the shares, exchange-traded funds and other approved securities you already hold to work as collateral margin for trading, without selling them. On Zerodha the request is created on Console , but the pledge only becomes real once you authorise it on the CDSL page using a TPIN and a one-time password. This guide walks through placing that request, completing the OTP-based authorisation before the day’s cut-off, how long the collateral margin takes to show up, and what to do if the authorisation is missed.

If you are new to the idea, start with how pledging works on Zerodha and the broader walkthrough of how to pledge holdings for margin . This page focuses narrowly on the depository authorisation step, which is where most first-time pledgers get stuck.

Why the CDSL authorisation exists

Since the SEBI margin pledge system took effect on 1 September 2020, brokers can no longer move client securities into a broker pool account to raise margin. Instead, your shares stay in your own demat account and only a pledge is marked in favour of the broker in the depository. That change was introduced through SEBI circular SEBI/HO/MIRSD/DOP/CIR/P/2020/171 and is explained in detail in our note on the SEBI margin pledge rules of September 2020 .

Because the securities never leave your account, the depository needs your direct consent every time a pledge is created. If you have not signed a power of attorney (POA) or a Demat Debit and Pledge Instruction (DDPI) mandate, the only way to give that consent is through the CDSL authorisation page, which verifies you with a one-time password. This is the same architecture that protects investors from the kind of misuse seen in the Karvy pledge episode of 2019 , where client shares were pledged without authority under the old pool-account system.

Before you begin: the prerequisites

Three conditions must be true before a pledge can go through.

First, the Futures and Options (F&O) segment must be activated on your account. Collateral margin is used for equity intraday, futures and option writing, all of which need F&O enabled, so Zerodha will not let you pledge if the segment is off.

Second, the security must be on the approved list. Only instruments on zerodha.com/approved-securities can be pledged, because that list is controlled by the clearing corporation. If a stock is not on the list, no amount of authorising will create a pledge.

Third, the holdings must have settled. Shares you bought today are not yet in your demat account for pledging; they settle the following trading day under the current T+1 settlement cycle, so you can pledge them from T+1 onwards. Zerodha’s own help text still refers to T+2 in places, which is stale, since the Indian cash market moved fully to T+1 settlement by January 2023.

Placing the pledge request on Console

Sign in to Console with your Kite username and password. Open the Portfolio menu, go to Holdings, and choose the Pledge option, or open the dedicated Pledge page directly. Pledge requests can be submitted between 8 AM and 5 PM on trading days.

Tick each security you want to pledge and enter the quantity for each. A single request can hold up to 50 different securities; if you want to pledge more than that, process one request first and place another afterwards. Before you submit, it helps to understand the haircut applied to pledged securities , because the collateral you receive is the previous closing value less that haircut. A stock worth Rs 1,00,000 at a 10 percent haircut yields Rs 90,000 of collateral, while the shares themselves stay worth Rs 1,00,000.

When you submit, Zerodha applies a pledge charge of Rs 30 plus 18 percent GST per ISIN, which works out to about Rs 35.40 for each distinct security, whatever the quantity. Our page on Zerodha pledge charges sets out the full fee picture, including the fact that unpledging is free. Submitting the request is not the end of the process. At this point the pledge is only requested, and the depository still needs your authorisation.

Authorising on the CDSL page with TPIN and OTP

Immediately after you submit, Zerodha directs you to the CDSL authorisation page. CDSL also sends a link to the mobile number and email registered with your demat account, so if you closed the window you can reopen the flow from that link.

On the CDSL page, confirm your PAN or the identifier shown and review the list of securities and quantities. Check that they match the request you placed on Console, then generate the OTP. CDSL delivers a one-time password to your registered mobile and email. Retrieve it quickly, since the OTP is valid only for a short window, and use the resend option on the same page if it does not arrive rather than abandoning the request.

Enter the OTP and submit to authorise. This is the step that actually marks the pledge in favour of Zerodha Broking Limited in the depository system. Once CDSL accepts the OTP, an on-screen confirmation appears, and the request status on Console should move to SUCCESS.

How long the collateral margin takes to appear

After a successful authorisation, the collateral margin usually reflects in your Kite Funds tab within a few minutes. Zerodha’s pages quote a window in the region of five to fifteen minutes depending on the instrument, so treat “a few minutes” as the realistic expectation rather than an instant credit. Collateral from certain mutual funds, including those pledged through the mutual fund route, may only appear on the next trading day, as covered in how to pledge mutual funds for margin .

The credited amount is shown separately from your cash balance under Funds. Remember that collateral margin does not add to your withdrawable balance, and that for overnight F&O positions at least half of the required margin must come from cash or cash-equivalent collateral under the 50:50 cash-collateral rule . The difference between the two components is explained in our note on the cash component versus collateral component .

What happens if you miss the authorisation

The authorisation must be completed on the same day you place the request, before the end-of-day cut-off. If you submit a pledge request but do not authorise it in time, the request is not processed and lapses at the end of the day, typically shown as OVERDUE. You receive no collateral margin for an unauthorised request.

There is an important knock-on effect. Securities that are sitting in a PENDING, SUCCESS or OVERDUE status cannot be pledged again the same day. So if you miss the cut-off, you cannot simply resubmit that afternoon. You would wait for the securities to return to free holdings and place a fresh pledge request on the next trading day, then complete the CDSL authorisation promptly. A pledge request that is already submitted and awaiting authorisation also cannot be cancelled midway; you either finish the OTP step or let it lapse.

What can go wrong, and how to fix it

The OTP does not arrive. Check that the mobile number and email on the CDSL page are the ones registered with your demat account. Use the resend option, and confirm that SMS delivery is not blocked. If the contact details are outdated, you will need to update them with Zerodha before the pledge can be authorised.

The status stays PENDING. This almost always means the CDSL authorisation was not completed. Reopen the CDSL link and finish the OTP step. If the day’s cut-off has passed, place a new request the next trading day.

The collateral is smaller than expected. That is the haircut at work, not an error. The margin is the previous closing value minus the security’s haircut, and more volatile securities carry larger haircuts. The live figure for each instrument is published on the approved securities list.

The security is not eligible. If a holding cannot be selected for pledging at all, it may not be on the approved list, may not have settled yet, or the F&O segment may not be activated. Our companion guide to using collateral margin for F&O explains what the margin can then be used for once it is credited.

After the pledge: managing and releasing it

Once the pledge is live, the collateral margin sits under Funds until you either use it or release it. When you no longer need the margin, you can unpledge the holdings to return the shares to free delivery status; unpledging is free and does not require a fresh CDSL authorisation the way pledging does. If you want to sell the shares while they are still pledged, you can do that directly through the sell-pledged flow without placing a separate unpledge request first.

Disclosure: WebNotes maintains an affiliate relationship with Zerodha and may earn a referral commission when a reader opens an account through links elsewhere on this site. This is an operational how-to guide and carries no referral or affiliate link. We hold no position that depends on which broker you use, and this walkthrough is written solely to document the pledge authorisation process accurately.

See also

• How pledging works on Zerodha
• How to pledge holdings for margin on Zerodha
• Zerodha pledge collateral margin explained
• Zerodha pledge charges
• How to unpledge holdings on Zerodha
• How to sell pledged shares without unpledging
• How to pledge mutual funds for margin on Zerodha
• The 50:50 cash-collateral rule explained
• SEBI margin pledge rules of September 2020
• CDSL