Kotak Securities MTF Review

• Enhanced Buying Power: Get up to 5X leverage on 1300+ eligible stocks
• Low Interest Rates: Interest starts from 9.69% p.a. under Trade Free Pro
• No Holding Time Limit: Hold MTF positions as long as you maintain margin
• Cashless Trading: Use shares and ETFs as collateral
• Trade Now, Pay Later: Buy shares even when you are short on funds
• Expert Research Support: Access MTF's monthly picks backed by Kotak’s research team
• SEBI-Regulated: Fully compliant with SEBI margin trading guidelines

Margin Trading Facility (MTF) allows you to buy shares by paying only a fraction of the total trade value. The remaining amount is funded by Kotak Neo and charged at a nominal interest rate.

Working Explained with an Example

• You invest a small margin in cash or pledged stocks
• Kotak Neo funds the remaining value
• Shares are held as collateral in your Demat account
• Interest is charged only on the borrowed amount
• You can sell the shares anytime or add funds to reduce funding

Placing an MTF Trade on Kotak Neo

1. Go to the buy order page of your preferred stock.
2. Enter quantity and Select “MTF” under the product type.
3. Once done, you will be able to place an order using MTF.
4. Cross-check the order details and proceed to buy.
5. Your order will be placed under MTF.

Eligibility & Activation for Kotak MTF

• Active Kotak Securities trading account
• KYC compliant
• Acceptance of MTF terms & conditions
• Selection of stocks from the approved MTF list

How to Activate MTF

Online

• Go to the Stock Order Page, or
• Account Details → Products → Pay Later (MTF) → Activate

Offline

• Email acceptance to service.securities@kotak.com with client code
• Download the MTF activation form from the Kotak Neo website
• Activation confirmation is shared via email

Kotak Securities MTF Stock Market List

To access the Kotak Securities MTF List, follow the steps:

1. Open the Kotak Neo website
2. Click on Products and MTF
3. Click on ‘Explore MTF eligible stocks List.’

Checking MTF Stock Positions in Kotak Securities

1. Log in to Kotak Neo: Log in to the Kotak Neo website or mobile app using your credentials.
2. Go to Portfolio or Positions: Open the Portfolio or Positions section from the dashboard.
3. Identify MTF Positions: Look for trades marked as MTF or Pay Later (MTF) under the product type. These are your funded positions.
4. Check MTF Ledger: Go to Reports and click on Ledger.
   Apply the “Only MTF” filter to view MTF trades, interest charges, brokerage, and profit or loss.
5. Check Cash Ledger: Apply the “Only Cash” filter to see margin transfers between Cash and MTF ledger.
6. View Combined Ledger: Open the default NSE Ledger to see both Cash and MTF entries together.

How to Convert MTF Positions to Delivery in Kotak Neo?

1. Select the MTF Position: Go to your Positions section and choose the Pay Later (MTF) stock you want to convert to CNC.
2. Enter Conversion Amount: Enter the quantity or value (for example, ₹30,000 worth) that you want to convert from MTF to CNC.
3. Ensure Sufficient Funds: Make sure you have ₹30,000 free cash available in your Cash ledger at the time of conversion.
4. Cash Funding for Conversion: Since CNC is a delivery trade, you must pay the full amount from your Cash ledger for the converted portion.
5. Ledger Adjustment: The Pay Later (MTF) ledger will be credited by ₹30,000 (reduction in funded amount).
   The NSE (Normal) ledger will be debited by ₹30,000 (cash used for delivery).
6. Position Status Update: The converted portion will now be treated as a regular CNC delivery holding, while the remaining quantity continues under MTF.

Important Points:

• Conversion allowed only during market hours till 3:20 PM.
• Only carry-forward MTF positions can be converted (not same-day trades).
• Interest is charged for the conversion day; stops from T+1 day.
• Margin benefit on sell (after conversion) is available on T+1 day.
• On NEST Trader, use Netwise/Overall option.
• On ODIN, contact customer support for conversion.

Pledging Shares for Kotak MTF:

1. Go to the funds section and click on "pledge shares for more margin."
2. You will see the eligible list of shares that can be pledged, along with the margin.
3. Select the shares and quantity you wish to pledge and click on the pledge button

Starting February 24, 2025, Kotak Securities has introduced automatic pledging (auto-pledge) for all stocks purchased under Pay Later (MTF). This makes the process smoother and eliminates manual steps.

Important Considerations for Kotak MTF Automatic Pledge Creation

• Stocks bought under Pay Later (MTF) will be auto-pledged.
• You no longer need to manually confirm the pledge on NSDL.
• The pledge happens automatically after the shares are credited.

Securities Credited to Your Demat

• MTF-purchased shares will now be directly credited to your Demat account.
• After the credit, they will be automatically pledged to Kotak.

No Pledge Confirmation Links

• Earlier, you received pledge confirmation links (OTP-based approval).
• With auto-pledging, no pledge intimation or confirmation link will be sent.

No Change in Charges

• Pledge charges remain the same.
• There is no additional cost due to auto-pledging.

Pros

• Higher buying power with leverage
• Low interest under Trade Free Pro
• No fixed holding period
• Cashless trading via pledged shares
• Pay interest only on the funded amount

Cons

• Interest cost increases with the holding period
• Margin calls if stock prices fall
• Only approved stocks are eligible
• Requires active monitoring; invest only if you are bullish on your idea
• Full payment is needed to convert to delivery
• Failure to pledge converts your MTF position into a CNC position

Kotak Securities Margin Trading Facility (MTF) is a powerful tool for investors who want to enhance their buying capacity without deploying full capital upfront. With up to 5X leverage, interest starting from 9.69% p.a. under the Trade Free Pro plan, and no fixed holding period, it offers flexibility and liquidity. However, since it involves borrowed funds, investors must actively monitor positions, manage margins carefully, and understand the associated interest costs before using MTF.

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