When investors buy or sell shares, the transaction is settled either through the delivery of certificates or electronic book entry. In this context, high delivery stocks are shares where a high proportion of the traded volume results in the actual transfer of ownership (delivery) from the seller to the buyer
Let's understand the difference between delivery and book entry.
- Through delivery: Trade settles through delivery with actual share certificates transferred from the seller to the buyer.
- Electronic book entry: Trade settles electronically, meaning ownership is recorded electronically.
Generally, Investors settling their trades through delivery or in other words getting share certificates indicates their confidence to invest in those stocks for the long term rather than settling transactions electronically. In India, an electronic book entry is recorded through the investor's Demat account. Other than shares, the Demat account also holds other securities in an electronic format
To further understand the concept of high-delivery stocks, let's go through the interconnection between the total Trading volume and delivery volume.
Total Trading Volume
The total trading volume is the overall number of shares bought and sold during a specific period, typically measured over a day, week, or month. The total trading volume includes all transactions recorded via physical delivery and electronic book entry.
Trading volume reflects the level of interest and liquidity in a particular stock or market.
High trading volume indicates increased investor interest and is associated with significant price movements.
On the other hand, low trading volume suggests a lack of interest or participation.
The total trading volume is calculated by adding up the number of shares traded for a specific security during the chosen timeframe. It's a key factor that investors consider when analyzing the price movements.
Delivery Volume
Delivery volume is the total number of shares physically transferred from one investor's account to another's. Delivery volume is a subset of the total trading volume.
A high delivery volume is a sign of strong investor confidence and a belief in the strength of the stock. Investors opting to take delivery of share certificates instead of trading them within the same day indicate a long-term investment approach.
On the other hand, a low delivery volume indicates investors are not interested in holding onto the stock for a long time. This kind of trading is often based on short-term speculation and not believing in the company's long-term potential.
Why do Investors Prefer High Delivery Stocks?
Investors consider high-delivery stocks as a potential for sustained growth. When a stock consistently shows high delivery volumes, it is seen as a vote of confidence from investors. Stocks with high delivery percentage NSE are more liquid, meaning there is a higher trading volume and a more active market for buying and selling shares.
When high delivery volume aligns with a particular price movement, it confirms the trend making it easier for investors to invest confidentially. A sudden surge in delivery volumes signals to the investors about a possible positive development related to the stock and the presence of a potential opportunity.
High Delivery Indian Stocks
Here is a short list of High Delivery Stocks in India.
Tata Consultancy Services (TCS)
TCS is a High-delivery Indian Stock known for its stability, consistent financial performance, and leadership in the IT industry. TCS is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE). The company's stock is actively traded and has been a component of major stock market indices.
TCS Delivery Volume: Tata Consultancy Services (TCS) Delivery Volume was approximately 60% in November 2023.
Hindustan Unilever Ltd (HUL)
Hindustan Unilever Limited (HUL) is one of India's largest and most well-known consumer goods (FMCG) companies. HUL is a widely traded stock on the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE).
HUL Delivery Volume: The Delivery Volume for Hindustan Unilever Ltd (HUL) in November 2023 was roughly 68%.
Reliance Industries Ltd (RIL)
Reliance Industries is involved in a wide range of businesses including petrochemicals, refining, oil and gas exploration, telecommunications, retail, and digital services.
RIL Delivery Volume: The Delivery Volume for Reliance Industries Ltd (RIL) in November 2023 was approximately 61%.
HDFC Bank Ltd:
HDFC Bank provides various banking and financial services to individuals, businesses, and corporates. Its services include retail banking, corporate banking, treasury operations, and various specialized financial products
HDFC Bank Delivery Volume: The delivery volume for HDFC Bank Ltd. in November 2023 is 58%.
Maruti Suzuki (MARUTI)
Maruti Suzuki is known for its extensive range of cars, including hatchbacks, sedans, and sports utility vehicles (SUVs). Maruti Suzuki has shown strong financial performance that reflects its leadership position in the Indian automotive industry.
Maruti Suzuki Delivery Volume: Delivery Volume for Maruti Suzuki in November 2023 is 65%.
How To Find High Delivery Stocks?
Almost all Indian financial websites such as Trendlyne, MoneyControl, and Groww provide detailed statistics on stocks including their delivery volumes. In addition, the official websites of the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) also provide data on delivery volumes for the listed stocks. Many broker's platforms including HDFC Securities offer tools to analyze stocks, including information on high delivery percentage stocks.