How auction rate penalty is calculated?

How auction rate penalty is calculated?

The penalty for short delivery is determined based on the higher of the following two values:

Highest Traded Price between T and T+1:
This refers to the maximum price at which the stock was traded from the transaction day (T) up to the end of the next trading day (T+1).

Official Auction Market Closing Price on T+1 + 20%:
This is the closing price of the stock in the auction market on T+1, increased by 20%.

Final Penalty Basis:
The higher value between these two is used as the reference price to calculate the short delivery penalty.




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