Explanation of "Pledge" option in "Groww" and "Trading"

 

What is the charge on pledging?

Pledging is free of cost on Groww. No interest is charged on your pledge margin.

However, you will be charged Rs 20 + GST per script per request for unpledging the shares. 

For example, if you have 100 shares of TATA and 100 shares of ICICI and you unpledge it as follows:
  1. On Monday, at 1 PM: 50 shares of TATA - Rs. 20 + GST will be charged for this unpledge request
  2. On the same day at 2 PM 50 shares of TATA and 50 shares of ICICI: Rs. 40+GST will be charged for this unpledge request as there are 2 scripts, TATA and ICICI Involved.
Since, 2 unpledge requests were made on Monday, both will be charged individually.

What is "Pledge" on Groww?
Pledge is a way to get extra margin for trading by using stocks in your holdings as collateral. To put it simply, pledging is way of taking loans against your stocks. At Groww, You can use the margin received against the pledge only to trade in F&O and Intraday. There is no interest charged in pledging. However, the user will receive pledge margin after a fixed percentage deduction in pledge value also known as the Haircut.

What is "Haircut" in Pledge?
User will receive pledge margin after a fixed percentage deduction in pledge value also known as the Haircut. 

For example, If you hold 1 share which is worth Rs. 1000 in the market right now and you choose to pledge it to get some extra margin to be utilized in trading, you can do so on Groww. Let's say that Groww has a haircut of 30% on this stock, once your pledge request is executed, you will recieve Rs. 1000 - (30% X 1000) i.e. Rs. 700 in your Groww balance as Pledge margin. 

Please note that haircut is just a protective measure, it's not a charge, the value of your stock is still Rs. 1000 in the market and you'll get back your holdings once you unpledge your holdings. You can then choose to sell this holding at the market value.

What can I pledge to get a margin?
As of now you can only pledge stocks at Groww. Other investment instruments like Mutual funds, ETFs and SGBs etc are currently not supported for pledging.


What is the charge for unpledging?
Rs.20 + GST per script per request is charged for unpledging the shares. For example, if you have 100 shares of TATA and 100 shares of ICICI and you unpledge it as follows:
  1. On Monday, at 1 PM: 50 shares of TATA - Rs. 20 + GST will be charged for this unpledge request
  2. On the same day at 2 PM 50 shares of TATA and 50 shares of ICICI: Rs. 40+GST will be charged for this unpledge request as there are 2 scripts, TATA and ICICI Involved.
Since, 2 unpledge requests were made on Monday, both will be charged individually.

Can I sell my pledged holdings?
Yes, you can sell your pledged holding. Once you sell your pledged holding, it'll be unpledged and sold. You'll no longer receive the pledge margin benefit for that particular holding, and the same will be reduced from your Groww pledged balance.

Please note: If you have a negative Groww balance, please clear it by adding money to your Groww balance before selling the pledged stocks. If you sell your pledged stocks while you have a negative balance, funds received after selling the holdings will be used to recover the negative balance.

































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