T+1 Settlement: 80% Of India's Equity Market Moves To World's Fastest Trade Cycle

Indian stocks accounting for 80% of the nation's equity market capitalisation move to the shorter T+1 trade cycle on Jan. 27, completing the yearlong changeover in the settlement cycle.

Shares of 218 companies move to T+1 this week, making India the second market after China to implement the next-day settlement. Futures and options contracts were to be transitioned in two phases—in December 2022 and January 2023. These include large-cap and blue-chip companies.

Based on the ranking, the bottom 100 stocks moved to T+1 settlement on Feb. 25, 2022. From March 2022 onward, on the last Friday (trading day) of every month, the next bottom 500 stocks moved to the shorter cycle until January 2023.

T+1 means a transaction for purchase or sale of securities will reflect the next day in the demat account of an investor. It took 20 years to move from T+2 to T+1. India moved from T+3 to T+2 in April 2003. Reduced settlement days provide better liquidity to investors and lower the cost of capital.