Pledging is a mandatory process for stocks bought using MTF.

Starting 24th February, 2025, any position taken using MTF will be auto-pledged. It would mean that you will no longer be required to manually pledge your shares. Additionally, you will also not receive any link for confirming the pledge for MTF.

Yes, there will be a charge of ₹25 + GST for pledging or unpledging shares under Margin Trading Facility (MTF). These charges are applicable as per the guidelines of depositories NSDL and CDSL, and are applicable on a per-ISIN basis per instruction.

What is ISIN?

ISIN (International Securities Identification Number) is a unique 12-digit alphanumeric code assigned to each security (such as stocks, bonds, or mutual funds) for identification. Since the charges are applied per ISIN, if you pledge or unpledge multiple securities, the fee will be charged separately for each ISIN.

You can square off your pledged MTF positions as needed.

For e-DIS customers, the mandate process is as follows:

• On the Order Verification page, you will be redirected to the depository’s e-DIS mandate page.
• Complete the two-factor authentication by entering your MPIN and OTP.
• This mandate will authorize the selected stock for the transaction and remains valid for one trading day.

If you choose the Convert to Delivery (CTD) option:

• You can convert your MTF position to delivery from the Open Positions page.
• This can be done using the Convert to Delivery option after your pledge is confirmed.

What is e-DIS?

e-DIS (Electronic Delivery Instruction Slip) is a digital method of authorizing the sale or transfer of shares without requiring a physical DIS slip. It ensures a seamless and paperless way to transact, using a secure two-factor authentication process via MPIN and OTP.

Starting February 24, 2025, any position taken using MTF will be auto-pledged.

This means that

• You will no longer be required to manually pledge your shares.
• You will also not receive any link for confirming the pledge.

Under the Direct payout facility, shares purchased under MTF are transferred to your mapped demat account followed by creation of an auto-pledge in favour of 'Client Securities under Margin Funding Account'. If the pledge cannot be established due to an inactive, frozen, or suspended demat account or any other reason which are beyond our control, ICICI Securities reserves the right to settle, square off, or close out such unconfirmed positions within five trading days from the payout date.

It is an account the broker maintains with the depositories to manage pledges of securities bought through the Margin Trading Facility (MTF). When you purchase shares under MTF, they are automatically pledged in favour of ICICI Direct – CSMFA in your demat account. If the pledge cannot be created, any unconfirmed MTF position will be squared off (closed) within five working days of the payout date.

With MTF, you can buy stocks by paying a marginal amount, and ICICI Direct funds the rest. You can hold the position for up to 360 days as a leveraged position or pay back the remaining amount anytime to get the shares released in your demat account, also known as convert to delivery (CTD).

Let’s understand this with an example. Say you want to buy 1,000 shares of ABC Ltd. at ₹100 per share, but you have only ₹25,000 in your account, you can use MTF to increase your buying power to ₹1,00,000 with 4X leverage.

If price ABC Ltd. stock rises to ₹110 per share then:

If price ABC Ltd. falls to ₹90 per share then:

MTF is best suited for experienced investors who understand the risks of leveraged trading. But remember, since you’re trading with 4 times leverage, your gains as well as your losses can be amplified.  It requires active management of your positions and the ability to quickly respond to market changes. It is not suitable for risk averse traders.

Trading with MTF requires active management of your positions and the ability to quickly respond to market changes. If the value of your stocks (pledged shares) falls below a specific price or trigger price, your position will get squared off due to margin shortfall. So, you need to make sure your trading account always has sufficient margin / limits to avoid closure of positions. You can check the trigger price on your MTF positions page. 

There are 3 kinds of costs involved while transacting in MTF

1. Brokerage cost: The brokerage rate charged for MTF transactions is as per your existing delivery rates. This rate can go as low as 0.07%, depending on your brokerage plan. You can check you plan on Mobile App by visiting the Menu section -> At Your Service -> Brokerage Plan

2. Interest charges: Interest is charged on the funded amount availed for creating the MTF position. You will be charged interest daily for the number of days in MTF. The interest rate can be as low as 0.0265% per day (9.65% p.a) and can go up to 0.049% per day (17.99% p.a), depending on the brokerage plan chosen. Don’t forget to factor in interest cost while calculating your potential returns or losses before exiting

3. Pledge Charges: To hold positions in MTF for more than a day, your shares have to be pledged. You are charged ₹25 +GST on every pledge instruction. This charge is applicable both at the time of pledge creation while buying stocks and at the time of selling the MTF positions for pledge closure / invocation.

When you create positions in MTF, interest is charged on the funded amount. This interest depends on your brokerage plan and can go as low as 9.65% p.a.

Positions created in MTF can be held for a max holding period of 360 days. Any positions post the expiry date will be automatically closed/squared off. That means your MTF positions will be sold off.
Please note that, if your expiry falls on the weekend or trading holiday. The positions will be closed on the following day.

When you buy stocks in MTF, you only pay a portion of the total transaction value, with the rest being funded by ICICI Direct.

The portion that you pay is called Initial Margin and it varies from stock to stock depending on various risk parameters.

This margin can go as low as 25%, letting you buy stocks up to 4 times your initial funds.

Yes, the Initial margin used for creating positions in MTF is the same whether you use Cash or Shares as Margin limits.

The interest is charged only on the funded amount for your MTF transactions.

When you purchase stocks through Pay Later - MTF, you only pay the fraction of the transaction value also known as Initial Margin, with rest being funded by ICICI Direct

If you are providing the margin through cash, then the remaining value of the transaction is the funded amount.

Let’s say you create a position worth ₹10,000 in MTF. The initial margin for creating this position is ₹3000, then refer to the table below to understand the difference in interest applicable when using cash margin versus existing shares as margin (SAM limit)

Shares purchased under the Margin Trading Facility (MTF) must be pledged as per exchange regulations. These shares are credited to your demat account under a pledged status.

The "Demat Holdings" section on ICICI Direct only displays shares that are freely available in your demat account. Since MTF shares are pledged, they do not appear under "Demat Holdings."

However, to provide a comprehensive view of your investments, MTF holdings are displayed under the "Portfolio" section. This ensures you have a complete picture of your holdings, including pledged shares. Your MTF positions are also displayed in the MTF section in "Open positions" page.

You can view your MTF positions through the following paths:

1. On Portfolio page 

Click on Stocks tab -> Go to Portfolio 

2. On Open positions page 

Click on Stocks tab -> Go to Open Positions -> Click on MTF (Pay Later) tab

BEML Limited has announced a Stock Split in the ratio of 1:2, with the Record Date: 3rd November, 2025.

The price will adjust by ~50%, which may temporarily affect how the current MTF positions are displayed until the new shares are credited.

Key Points to Note:

- Sale of MTF Shares / Convert to Delivery of the stock will not be allowed on 3rd and 4th November.

- The newly issued shares (on account of the stock split) will be credited by 4th November. These shares will automatically reflect under your MTF positions and will be auto-pledged under MTF.

- Normal trading in MTF resumes from 5th November.

- Monitor your existing positions and maintain sufficient margin to avoid any automatic square-off of open positions.

Customers may convert their MTF positions to Delivery before 31st October if they wish to sell their BEML shares during the restriction period.

If your current margin blocked (only in the form of Shares as Margin – SAM) for an existing MTF position is higher than the margin required to maintain that position as per the latest risk parameters, the excess margin will be released back to your trading account limits.

Example:

If you have an MTF position on 100 shares of ABC Ltd for which ₹10,000 is currently blocked, but the current margin requirement is now only ₹8,000, then ₹2,000 will be released to your trading account limits.

Points to Note:

a. Margin is released after considering any unrealised losses on your position.

b. Released margin may include margins you manually added to safeguard your position. You may add it again if required.

c. Excess margin blocked in the form of cash will not be released.

d. Margin release will not result in unpledging of shares pledged under SAM.

You are advised to monitor your MTF positions and maintain sufficient margins at all times.

A margin shortfall in your MTF position can occur due to various reasons, such as:

• Stock hitting upper or lower circuit, preventing square-off
• Increase in VaR/ELM margins
• Adverse price movement increasing margin requirement
• Any other change in margin norms or position value

If a margin shortfall occurs, you must take one of the following actions by the end of the same trading day:

• Add Margin: Deposit the required funds to clear the shortfall
• Convert to Delivery (CTD): Convert the position to delivery

If no action is taken by EOD, ICICI Direct will forcefully convert the position to delivery on the next trading day as per their policy.

Even after CTD, your account may still show a margin shortfall or negative limit. In such cases, ICICI Direct can recover it by:

• Squaring off other MTF positions, or
• Selling shares available in your demat account

The sale proceeds will automatically be used to clear the negative limit.

If your outstanding MTF interest exceeds the threshold (as per internal risk management), ICICI Direct may liquidate your pledged shares under Shares as Margin (SAM) to recover dues, as per internal risk management policies. At present, the threshold is set at outstanding amount ₹1000 or interest amount lying unpaid for over 30 days.

How can I avoid liquidation of pledged shares?

You can allocate funds to your Stocks segment to clear the outstanding dues to avoid liquidation.

How to allocate funds:

Through App: Menu → Manage Funds/Limits → Add (under Stocks Tab)

Through Website: Funds → Allocate Funds → Add (against Stocks)

Example 1:

If your outstanding MTF interest amount is ₹ 1200, ICICI Direct may liquidate your pledged shares under Shares as Margin (SAM) to recover the outstanding interest amount.

Example 2:

If your outstanding MTF interest amount is ₹500 but has remained unpaid for more than 30 days, ICICI Direct may liquidate your pledged shares under Shares as Margin (SAM) to recover the outstanding interest amount.

Conversion of shares from MTF position to delivery can only be done between 06:00 AM till 3:30 PM on trading days.

Interest on your funded positions in MTF is based on the market settlement cycle. This means:

• When you buy a stock on Monday, settlement happens on Tuesday and interest starts to be charged from Wednesday.

STOCK X Bought on Monday

STOCK X Settlement on Tuesday

STOCK X Interest Charged from Wednesday

• If you sell this stock on Thursday, sell settlement for the sale happens on Friday. So, the interest will be charged on Wednesday, Thursday and Friday.

Interest on MTF is calculated based on the funded amount and the number of days you hold the position.

Interest Calculation:

• Interest is charged on the funded amount and the Shares as Margin (SAM) amount (if any) blocked against your MTF positions.
• The interest period starts from the exchange pay-in date (when the settlement occurs) and continues until the payout date (when funds are received).
• Interest is calculated on a daily basis, including weekends and market holidays.

How is Interest Deducted?

• The applicable interest rate depends on your brokerage plan.
• Interest is automatically deducted from your bank or trading account.

To reduce the interest charges, you can either opt for Prime Plans for lower MTF interest rates, or add more margin using the "Add Margin" option to increase your upfront margin and reduce the funded amount, thereby lowering interest costs.

The remark “Interest on MTF(SAM)” appears when you create positions in MTF using Shares as Margin (SAM) limits instead of cash. Interest will be charged on the limits that have been utilized to create these positions. The rate of interest is the same as your existing applicable MTF interest rate.

The interest cycle for it starts from T+1 day (T being the buy date) and ends on the day when the position is squared off.

For example, if you create a position in MTF on Monday using Shares as Margin limits and sell it on Thursday, you will be charged interest on Tuesday, Wednesday and Thursday.

The interest on your Margin Trading Facility (MTF) position is recovered in a defined order. The debit follows this priority:

Payout: Any funds that are due to be credited to your trading account—such as proceeds from stock sales—are first used to recover the MTF interest.

Equity Limits: If the payout amount is insufficient, the system will utilize the available limits in your equity segment (i.e., your trading balance) to adjust the interest amount.

Linked Bank Account: If both payout and equity limits are inadequate, the remaining interest is directly debited from your linked bank account.

Computer Age Management Services (CAMS) has announced a Stock Split in the ratio of 1:5, with the Record Date: 5th December, 2025. The price will adjust by ~80%, which may temporarily affect how your current MTF positions are displayed until the new shares are credited.

Key Points to Note:

• You can continue to hold your existing CAMS MTF positions
• Margins in the stock for MTF will not be increased
• Sale of MTF Shares / Convert to Delivery of the stock will not be allowed from 5th to 8th December.
• The newly issued shares (on account of the stock split) will be credited by 8th December. These shares will automatically reflect under your MTF positions and will be auto-pledged under MTF.
• Normal trading in MTF resumes from 9th December.
• Monitor your existing positions and maintain sufficient margin to avoid any automatic square-off of open positions.

You may convert your MTF positions to Delivery before 4th December if you wish to sell your CAMS shares during the restriction period.

Hindustan Unilever Ltd has announced a demerger of its ice cream business Kwality Wall’s India (KWIL) in the ratio of 1:1, with a record date of Dec 5, 2025.

Important updates related to your MTF positions during the demerger process:

• You can continue holding your existing MTF positions in Hindustan Unilever.
• MTF margins for the stock will not be increased.
• Monitor your existing position and maintain sufficient margin to avoid square-off of open positions.
• As per the demerger, you will receive 1 share of Kwality Wall’s India Ltd in your demat account for every share of Hindustan Unilever Ltd held on Dec 5.
• Kwality Wall’s India shares will be released as free holding in your demat account within 1 day from the listing date.  You may have to manually allocate these shares for reflecting in you “demat holding section” through the Allocate option on the Demat holdings page on listing date.
• A special price discovery session will be held on Friday, Dec 5, from 9:00 AM to 10:00 AM. Buying and selling of Hindustan Unilever stock through MTF will not be allowed during this session.