If the shares are not bought in the auction, the close-out is done by paying compensation to the buyer. A payment equivalent to any of the following is made: The value of the short delivered security at the highest price prevailing in the stock exchange from the day of trading till the auction day or 20% above the official closing price on the auction day, whichever is higher is paid. For all short deliveries for;

1. Companies listed in the “Z group” of BSE, and
2. Trade for trade securities at both Exchanges, the trades are compulsorily closed out.

If no bids are received from the trading members during the auction process then also the closeout is resorted to. In case of failure of the auction seller to deliver the securities (fully or partly) on the auction pay-in day, the deal will be closed out at The highest price prevailing on the exchange from the day on which the trade was originally executed till the day of closing out, or 20% over the official closing price on the closeout whichever is higher. It will be charged to the auction seller unless otherwise specified.