Don’t Sell, LEND Dont Buy, BORROW

Sampath Kumar (name changed), a software professional from Bengaluru, holds 2,000 shares of L&T Finance in his portfolio with other shares. Without trading in them and retaining the ownership of these shares, Kumar earns around Rs 3,000 to Rs 4,000 every month. Another professional stock trader from Mumbai, Praveen Kamdar (name changed), holds 4,000 shares of PVR Cinema, besides other stocks. This stock falls under the hospitality sector and with post-pandemic restrictions like social distancing, the stock price was beaten down. Yet, Kamdar earns a decent Rs 8,000 to Rs 12,000 every month from his holding. You may wonder how this is possible. Well, in both cases, these shareholders participated in Securities Lending and Borrowing (SLB) – a platform offered by stock exchanges, where traders can borrow shares they do not own, and can lend the stocks they own. An SLB transaction...