How to fix a DP-related sell rejection on Zerodha

From WebNotes, a public knowledge base. Last updated . Reading time ~9 min. Level: Intermediate.

A DP (Depository Participant) sell rejection on Kite occurs when the system cannot authorise a debit from your demat account to deliver shares against a sell order. Since all equity delivery positions in India are held in dematerialised form with the depository (CDSL in Zerodha’s case), the demat debit authorisation is a mandatory step for every delivery sell.

There are two valid methods to authorise a demat debit at Zerodha: the TPIN + CDSL OTP flow (transaction-by-transaction, online), or the pre-authorised DDPI (Demat Debit and Pledge Instruction). The older Power of Attorney (POA) arrangement was phased out by SEBI in 2022 in favour of DDPI.

Conflict-of-interest disclosure. This guide is published by WebNotes Editorial Team for informational purposes only. WebNotes has no commercial relationship with Zerodha, CDSL, or SEBI.

Prerequisites

  • An active Zerodha trading and demat account.
  • Delivery holdings in the demat account (CNC buy that has completed T+1 settlement).
  • A CDSL TPIN set at cdslindia.com/easi, or DDPI activated through Zerodha Console.

Step 1: Read the rejection message carefully

Open the Orders tab on Kite. Click the rejected sell order. The Reason field will contain one of these messages:

Rejection messageRoot cause
“Insufficient holdings” / “Holdings not available”Shares not present in the free demat balance
“DP not authorised” / “TPIN not authorised”TPIN OTP was not submitted or the authorisation was not completed
“Shares in T1 bucket”Shares from a recent buy are in T1 (not yet settled)
“Shares pledged”Shares are under pledge and not in free demat balance

Identify which category applies before proceeding.

Step 2: Confirm the holding is present in the demat account

Open Kite’s Holdings tab. Locate the instrument. Note the following columns:

  • Quantity: total shares credited after settlement.
  • Used Quantity: shares already earmarked for an open sell order or pledged.
  • Free Quantity: shares available to sell without restriction.

Only the Free Quantity can be sold in a delivery order. If Free Quantity is zero but Quantity is non-zero, the shares may be pledged.

To verify independently, log in to CDSL Easi and check the holding balance. The Easi portal shows the depository record directly, not Zerodha’s database.

T1 shares

Shares from a CNC buy executed on trade day T are in the T1 bucket on T+1 until the depository credits them after settlement. These shares cannot be sold as delivery (they are not yet in your demat account). They can be sold as BTST (Buy Today Sell Tomorrow), but this carries the risk of short delivery if the T+1 settlement of the buy is delayed. For ordinary delivery selling, wait for the T+1 credit to appear in Holdings before placing the sell.

Pledged shares

Shares pledged as collateral for F&O margin cannot be sold until the pledge is released. Unpledge the shares through Console > Portfolio > Holdings > Unpledge, then wait one business day for the unpledge instruction to be processed by CDSL before selling.

Step 3: Authorise the DP debit using TPIN

If the holding is confirmed to exist in free balance and the rejection is “DP not authorised,” the TPIN authorisation was not completed.

When TPIN authorisation is required

When you place a delivery sell order on Kite (CNC), if you do not have DDPI activated, Kite displays a TPIN authorisation screen before or during the order flow:

  1. Kite shows a CDSL-hosted authorisation page.
  2. Enter your 6-digit TPIN (your depository transaction PIN, set on the CDSL Easi portal).
  3. A CDSL OTP is sent to the mobile number registered with Zerodha (which must also be your CDSL-registered mobile).
  4. Enter the OTP.
  5. The authorisation is granted for the session or for the specific instrument.

If you skip or close this screen, the sell order is placed without DP authorisation and will be rejected when Zerodha attempts to deliver the shares.

Setting or resetting your TPIN

If you have not set a TPIN:

  1. Log in to CDSL Easi using your BO ID (16-digit beneficiary owner ID) and PAN.
  2. Navigate to Services > Generate TPIN.
  3. Follow the steps to set a 6-digit TPIN.

If you have forgotten your TPIN, use the Forgot TPIN option on the CDSL Easi portal to reset it via OTP.

Step 4: Activate DDPI to avoid per-transaction TPIN requirement

DDPI (Demat Debit and Pledge Instruction) is a SEBI-mandated mechanism that pre-authorises Zerodha to debit your demat account for sell transactions without requiring a TPIN at each transaction. Once activated:

  • Zerodha can submit DIS (Delivery Instruction Slip) instructions to CDSL on your behalf.
  • Sell orders execute seamlessly without the TPIN step.
  • DDPI is instrument-specific or all-instruments, depending on what you signed.

How to activate DDPI on Zerodha.

  1. Log in to Console.
  2. Navigate to Account > Zerodha > DDPI.
  3. Follow the on-screen process, which involves submitting a digitally signed or physically signed DDPI form.
  4. Zerodha submits this to CDSL. Activation typically takes 2 to 5 business days.

After DDPI activation, you will not need to complete the TPIN OTP step for delivery sells.

Step 5: Handle special cases

BTST (Buy Today Sell Tomorrow)

BTST involves selling shares on T+1 (the day after the buy) before the T+1 settlement has credited the shares to your demat account. This is permitted but carries short-delivery risk: if the buy-side settlement fails for any reason, you will not receive the shares by the required delivery date for the BTST sell, triggering an auction by the exchange.

Zerodha processes BTST sells on a best-effort basis. If a BTST sell is rejected with “Insufficient holdings,” it is because Zerodha’s system does not permit the BTST for that instrument or quantity on that day. Check Zerodha support for the specific BTST rejection reason.

After a stock split, bonus, or rights issue, the ISIN of the shares may change. If you are selling using the pre-corporate-action ISIN after the ex-date, the holding may not match and the sell is rejected. Check the updated ISIN on the NSE or BSE website and ensure the instrument on Kite reflects the post-corporate-action ISIN.

What can go wrong

CDSL OTP not received. The OTP for TPIN authorisation is sent to the mobile number registered with Zerodha, which must also be the CDSL-registered mobile number. If your mobile number differs between Zerodha and CDSL, the OTP goes to the wrong number. Update your mobile number on CDSL Easi first, then retry.

DDPI activation delayed beyond 5 days. If DDPI is not activated within 5 business days of submission, raise a support ticket at support.zerodha.com with the reference number from the Console DDPI submission.

Sell rejected despite DDPI being active. DDPI activation on Zerodha’s system is separate from the CDSL record. If there is a mismatch, the demat debit instruction may still be rejected. Contact Zerodha support with the DDPI activation confirmation date and the rejected order ID.

Escalation path

  1. Zerodha support at support.zerodha.com for TPIN, DDPI, and DP authorisation issues.
  2. CDSL investor helpline at 1800-22-5533 for TPIN reset and Easi account issues.
  3. Zerodha grievance officer at zerodha.com/support/grievance for unresolved support tickets.
  4. SEBI SCORES at scores.sebi.gov.in for regulatory grievances.

References

  1. SEBI, “Circular on Demat Debit and Pledge Instruction (DDPI),” SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2022/80, June 2022.
  2. CDSL, “TPIN, Transaction PIN for demat debit authorisation,” cdslindia.com.
  3. Zerodha Support, “How to authorise a demat debit (TPIN / DDPI),” support.zerodha.com.
  4. Zerodha Z-Connect Blog, “DDPI, replacing POA for sell orders,” zerodha.com/z-connect.
  5. NSE India, “Settlement, securities delivery obligations,” nseindia.com.

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.