If shares you bought in Delivery are missing from your Holdings and your fund balance has gone up instead, your trade was closed out in cash. The seller on the other side couldn't deliver the shares (a short delivery), the exchange couldn't source them in the auction either, so your buy was settled in money instead of shares.
Before assuming that, check which day you bought. The shares only disappear on T+2 — on the buy day they're never in Holdings anyway, on T+1 they're showing but not yet final, and once they've settled they can't be taken back.
First: which day did you buy?
Counting from the day you bought (T day), this plays out over a fixed few days:
- T day — you bought today. The shares aren't in Holdings because they haven't settled yet. Nothing has gone wrong. See When will the shares I bought show in my Holdings?
- T+1 — the shares appear in your Holdings. They're there, but settlement isn't final. If the seller failed to deliver, the shortfall goes to the exchange auction at this point. Nothing has vanished yet — and this is the day the trap below applies, if you sell here.
- T+2 — this is when they disappear. If the auction couldn't source the shares, your buy is closed out: the shares come out of your Holdings and cash is credited instead. This is the day you notice the symptom — shares gone, balance up.
- After that. The shares have settled into your demat account and are fully yours — a close-out can no longer take them away. Something else is going on: check whether you sold them, or whether a corporate action is being processed.
Why did I get cash instead of the shares?
Every trade is guaranteed by the exchange's clearing corporation, so a buyer is never left empty-handed. When the seller fails to deliver and the auction can't procure the shares — for example, the stock is locked at its upper circuit with no sellers — the trade is closed out: it's settled in cash at the close-out price instead of by delivering the stock. That price is set to protect you (the higher of the highest price from the trade day to the auction day, or 20% above the auction-day closing price), so the credit you receive reflects the value of the shares — often more than you paid.
Did I lose out?
No — you're compensated, not shortchanged. You receive the value of the shares as cash rather than the stock itself. The one thing you don't get is the shares — so if you still want to own them, you'll need to buy them again.
What if I had already sold those shares?
This is the case worth watching, and it changes the answer above.
If the shares were showing in your Holdings on T+1 and you sold them that day — before the close-out came through on T+2 — your sale has nothing behind it. Your buy was settled in cash, so no shares ever arrived to deliver against your sell — which makes your own sale short, and it goes to auction the next day, with the auction cost debited to you.
None of that is your fault — the failure happened further up the chain — but it does mean there is something pending on your side. The full walkthrough is in Can a short delivery happen even if it's not my fault?
Do I need to do anything?
If you still held the shares when they were closed out — no. The settlement is complete and nothing is pending on your side.
- If you wanted the shares (not the cash), just place a fresh buy order — the money is already in your account.
- The extra funds are yours to trade with or withdraw like any other balance.
If you had already sold them — see the section above. Your sale is short and headed to auction; watch your ledger for the auction debit.
Is this the same as a short delivery?
Yes — this is the buyer's side of a short delivery. The seller is the one who defaulted; you were on the receiving end and were protected through the close-out. For the seller's side and the full mechanism, see what happens if a short sell can't be squared off and how the auction process works.