If you have insufficient stock holdings in your demat account for physically settled F&O contracts on the expiry day, you’ll be granted the option to purchase the required shares on the same day. Such purchases are deemed valid for fulfilling delivery obligations and comply with regulatory requirements regarding obligation netting between the F&O and capital market segments on corresponding trading dates.

For delivery positions, you should have stocks in the demat account on the expiry day. If sufficient stocks in the demat account are unavailable, then this will lead to short delivery and auction penalties.