In pursuance of SEBI guidelines for adjustment of Futures & Options Contracts on announcement of corporate action, the members of the Equity Derivatives Segment are hereby informed the following:
HAVELLS INDIA LTD (Scrip Code: 517354) has informed BSE that the Company has fixed August 27, 2014 as the Record Date for the purpose of sub-division of existing Equity Shares from every 1 (One) Equity Share of Rs. 5/- each into 5 (Five) Equity Shares of Re. 1/- each.
In view of the above and in compliance with the aforementioned SEBI guidelines, the Exchange shall make the necessary adjustments for all the available Futures & Options contracts on the underlying scrip HAVELLS INDIA LTD (Derivatives Asset Code - HAIL), on Monday, August 25, 2014 end of day, the ‘ex-date’ being Tuesday, August 26, 2014.
The adjustments to be made on account of stock split are given below:
A) Adjustment Factor:
If the ratio of Stock Split is say A:B, the adjustment factor is defined as A/B. The stock split ratio of HAVELLS INDIA LTD is 5:1. Therefore, the adjustment factor for stock split in this case would be 5/1 = 5.
B) Adjustments for Futures and Options Contracts:
Strike Price: The adjusted strike price will be arrived at by dividing the old strike price by the adjustment factor (5).The revised strike prices on account of adjustment would be as per the below example:
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Existing Strike Prices of Havells India Ltd (call/put)
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Revised Strike Prices of Havells India Ltd after dividing by adjustment factor 5 (call/put)
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1050
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210
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1080
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216
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1110
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222
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1140
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228
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1170
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234
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1200
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240
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1230
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246
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1260
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252
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1290
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258
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Market Lot: The adjusted market lot will be arrived at by multiplying the old market lot by the adjustment factor (5).The revised market lot would therefore be as under:
Existing Market lot -250; Adjustment factor - 5
Revised market lot after multiplying existing market lot by adjustment factor – 1250 (250*5)
Positions: The adjusted position will be arrived at by multiplying the old position by the adjustment factor (5). An example is given below
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Existing position before corporate action
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Adjusted positions after corporate action
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250
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1250
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500
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2500
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750
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3750
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1000
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5000
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Contract price: The adjusted contract price will be arrived by dividing the old contract price by the adjustment factor (5). The adjusted contract price shall be rounded off.
The members are requested to note that all the pending orders will be cancelled at the time of carrying out corporate action changes.
For & on behalf of BSE Ltd,
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Rajesh Saraf
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Ketan Jantre
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Sr.GM – Trading Operations
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GM – Trading Operations
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