stuck with short sell. What happens next?

Hi guys, I have a question about a peculiar problem I have.

I short sold LNT @ 2299.00 on 30th Sept 08. On the 1st of Oct, it fell by more than 50% (bonus issue). Now that my LNT shares going on auction on Monday, what happens next? How much penalty will I have to pay? Not to be highly optimistic but, will I get anything out of this deal??

yes you'll get the profit/difference after auction buyout.

Hi, Thanks for the reply Rizwan. But my broker said I wont be getting anything. He said that the short seller NEVER gets anything. Is it true or is my broker trying to take me for a ride?

Me too stuck with short sell...short sold 100 ICICI shares @ 412 but failed to cover up...now it goes to auction....

Could somebody tell how the penalty is calculated ...or the entire auction process preferably with an example... What % of the share value will the penalty be...

Thanks in advance..

The above link will help you in getting information about the auction process.

Hi Kapil...it was very informative...but it is from the buyer's point...it doesn't mention the process that a short seller undergoes....how he will be penalised...

My question is that i short sold ICICI for 412 on monday...and failed to cover up...on the auction day (T+5) if the price of ICICI falls to ..say 375 or so ..would the difference amt paid to me after the penalty...
This was told by my broker...just wanted to clarify....

Thanks.

Did you guys short L&T/ICICI the cash market? Was it naked short? Can't I keep my short positions (in CM) overnight? I don't have experience shorting in CM. I do short in futures only.

dear xtalk,
you need to cover your cash shorts by the time market closes...futures i bet u know about it.
btw i was about to give a link of this discussion to u,probably this is the guy who shorted those lt shares u were mentioning about...