Settlement of trades in Tulip IT Services Limited

Tulip IT Services Limited was listed on the Exchange on Thursday, January 5, 2006.   The public issue price was Rs.120/-.  As per the existing policy, no Circuit Filter was applied on the first day of listing to enable price discovery.  Circuit Filters are applied on the closing price from the second day of trading.

Trading in the shares commenced at the opening of the market at 9.55 a.m. at Rs.180/- (opening price).  In the afternoon, a sell order for a large quantity of shares was placed at a price of 25 paise.  As is evident, the sell order was placed at a price unrelated to the then prevailing market price and had a significant distortionary effect on the trading in the shares.  Initially, the sell order was matched against outstanding buy orders at various prices.  All subsequent buy orders were all matched at 25 paise. 

After detailed examination of the facts and circumstances, and to minimize the distortionary effect of the trades and also to protect the interest of entities dealing in the shares, the following decisions have been taken:

1. The buy orders at a price higher than Rs.96/- and matched against the said order, shall be deemed to have been transacted at such prices at which the trades were executed.  The cut-off price of Rs.96/- has been arrived at by applying circuit filter limit of 20% on the issue price of Rs.120/- on the lower side on the lines of the existing practice of application of standard Circuit Filter of 20% in the regular market. 
2. All other existing orders below Rs.96/- and which got executed against the said sale order will be deemed to have been transacted at a price of Rs.171.15.  The said price of Rs.171.15 has been arrived at by taking the weighted average price of the trades executed at or above Rs.96/- against the said sale order.
3. All other orders placed subsequent to said sale order and which were matched against the said sell order will be deemed to have been transacted at a price of Rs.171.15.
4. Based on the above settlement rate, the settlement obligations for Sett. No. 196/05-06 has been generated and downloaded to the trading members.

Kalyan S. Bose
Head – Corporate Affairs

January 6, 2006