Quick Scoop

In Zerodha, **auction** refers to a special exchange session used mainly when shares were **short-delivered** and need to be bought from the market to complete settlement. Zerodha’s help center says this auction usually happens **after 2:30 PM**, lasts about **30 minutes**, and is meant for **selling settled shares in your demat account**, not buying them.[9]

What it means

If a seller fails to deliver shares, the exchange arranges an auction to procure those shares and deliver them to the buyer. Zerodha also notes that only **settled shares** can be sold in this session; **T+1 quantities cannot be sold**, and the exchange acts as the buyer.[9]

How it works

\- You open **Kite > Bids > Auctions**.[9] \- You choose the eligible share and place a **sell at auction** order.[9] \- The auction window is collected, then matched by the exchange at the best available price.[1][9] \- The auction price can be up to **20% away from the previous close**, depending on the stock and liquidity.[1][9]

Key points

\- You **cannot buy** stocks in the auction session; it is a **sell-only** participation route for clients holding eligible settled shares.[9] \- Auction orders are typically collected until **2:30 PM**.[1][9] \- If your sell order executes, Zerodha says **80% of sale proceeds** may become available immediately, with the rest credited later as per normal settlement flow.[1]

Simple example

Suppose a stock closed at ₹100, but a buyer needs shares because of short delivery. In the auction, the exchange may source those shares at a higher price, sometimes up to the 20% circuit range, so the auction price could be around ₹120 in that example.[1][9] If you want, I can also explain **how to sell in Zerodha auction step by step** in plain language.