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:
INDRAPRASTHA GAS LTD has informed BSE that the Company has fixed November 10, 2017 as the Record Date for the purpose of Sub-division of One Equity Share of Rs. 10 each to Five Equity Shares of Rs. 2 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 INDRAPRASTHA GAS LTD (Derivatives Asset Code – INGL) on end of day on November 08, 2017 the ‘ex-date’ being November 09, 2017. The adjustments to be made on account of the above corporate action in line with SEBI guidelines 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 INGL is 10:2. Therefore, the adjustment factor for stock split in this case would be 10/2 = 5.
Therefore, based on the above, the final adjustment factor for the scrip INGL would be 5.
B) Adjustments for Futures & Options Contracts:
1. Strike Price: The adjusted strike price shall be arrived at by dividing the old strike price by the adjustment factor (5).The revised strike prices on account of adjustment shall be as shown below (example):
|
Existing Strike Prices (call/put)
|
Revised Strike Prices after dividing by adjustment factor (call/put)
|
|
1440
|
288
|
|
1470
|
294
|
|
1500
|
300
|
|
1530
|
306
|
|
1560
|
312
|
2. Market Lot: The adjusted market lot shall 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 - 550; Adjustment factor – 5
Revised market lot after multiplying existing market lot by adjustment factor – 2750 (550*5)
3. Position: The adjusted position shall be arrived at by multiplying the old position by the adjustment factor. An example is given below:
|
Existing position before corporate action
|
Adjusted positions after corporate action
|
|
550
|
2750
|
|
1100
|
5500
|
|
1650
|
8250
|
|
2200
|
11000
|
4. Futures price: The adjusted futures price shall be arrived by dividing the old futures price by the adjustment factor (5). The adjusted futures price shall be rounded off to the nearest tick size.
For any further clarifications, Trading members are requested to contact their designated Relationship Managers.
For & on behalf of BSE Ltd,
|
Ketan Jantre
|
Sandeep Pujari
|
|
GM – Trading Operations
|
AGM – Trading Operations
|
|