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:
NTPC LTD. (Scrip Code - 532555) has informed BSE that the Company has fixed March 20, 2019 as Record date for the purpose of Bonus Issue in the proportion of 1 (One) Bonus Equity Share of Rs.10/- each, for every 5(Five) existing Equity Share of Rs. 10/- 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 NTPC LTD. (Derivatives Asset Code – NTPC) on end of day on March 18, 2019 the ‘ex-date’ being March 19, 2019. 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 Bonus is say A:B, the adjustment factor is defined as (A+B)/B. Therefore, the adjustment factor for Bonus in this case would be (1+5)/5 = 1.2
Therefore, based on the above, the final adjustment factor for the scrip NTPC LTD. would be 1:2.
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 (1.2).
2. Market Lot: The adjusted market lot shall be arrived at by multiplying the old market lot by the adjustment factor (1.2).
The revised market lot would therefore be as under:
Existing Market lot - 4000; Adjustment factor – 1.2
Revised market lot after multiplying existing market lot by adjustment factor à
4800 (4000 *1.2)
3. Position: The adjusted position shall be arrived at by multiplying the old position by the adjustment factor.
4. Futures price: The adjusted futures price shall be arrived by dividing the old futures price by the adjustment factor (1.2). 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.
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For & on behalf of BSE Ltd,
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Ketan Jantre
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Sandeep Pujari
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Sr.GM – Trading Operations
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AGM – Trading Operations
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