How does the auction process work in case of short delivery? The auction price
The exchange does not specify the price at which the auction will take place but will allow auction participants to sell shares within a pre-specified range.
Upper limit of the range: 20% higher than the closing price of the share on the day prior (T+1, Wednesday) to the day of auction. If the closing price of ACC on T+1 was 1100 then the upper limit will be 1100+ (1100*20%) =1320
Lower limit of the range: 20% lower than the closing price of the share on the day prior to the day of auction. i.e. 1100-(1100*20%)=880 .
Thus an auction participant can offer to sell 100 shares of ACC in the price range of 880 to 1320.
In case of short delivery, an additional 0.5% penalty shall be levied towards auction penalty