In pursuance of SEBI guidelines for adjustment of Futures & Options Contracts on announcement of corporate actions, the members of the Equity Derivatives Segment are hereby informed the following:
UPL Ltd (Scrip Code: 512070) has informed the Exchange that Board of Directors of the company has decided, in meeting held, to issue equity shares on rights basis in the ratio of 1:8, i.e. 1 Equity Share for every 8 Equity Shares held at an issue price of Rs. 360 per equity share. Further, the company has fixed Record Date as November 26, 2024 for the purpose of determining the shareholders who will be eligible to apply for the Issue.
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 UPL Ltd (Derivatives Asset Code – UPHL), on November 25, 2024, end of day, the ‘ex-date’ being November 26, 2024.
The adjustments to be made on account of the above corporate action in line with SEBI guidelines are given below (Example):
A) Adjustment Factor:
If the ratio of Rights Issue is say A:B and the Issue price of Rights Issue is S, the adjustment factor is defined as (P-E)/P where P= Spot price on last cum date and
(Benefits per share) E = (P-S) x A / (A+B).
Underlying close price on the last cum date (P): Rs.566.10#
Issue price of the rights (S): Rs.360
Adjustment Factor:
Number of Existing Shares = 8
Rights Entitlement = 1
Total Entitlement = 9
Benefit per Right Entitlement
= (P – S) x Rights Entitlement
= (566.10 – 360.00) x 1 = Rs. 206.10
Benefits per share (E)
= (206.10/9) = Rs.22.900000
Hence, Adjustment Factor is
= (P-E)/P
= (566.10- 22.900000)/566.10
= 0.959548
Therefore, the adjustment factor in this case would be 0.959548
# the figure is only an indicative value for the purpose of example.
B) Adjustments for Options Contracts:
1. Strike Price: The adjusted strike price will be arrived at by multiplying the Existing Strike price by the adjustment factor 0.959548. The revised strike prices on account of adjustment would be as shown below (example):
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Existing Strike Prices
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Revised Strike Prices
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440
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422.20
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450
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431.80
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2. Change in Market Lot: The adjusted market lot will be arrived at by dividing the existing market lot by the adjustment factor 0.959548. The revised market lot would therefore be as under:
1300 (existing market lot) / 0.959548 (adjustment factor) = 1355(revised market lot)
C) Adjustments for Futures Contracts:
1. Futures price: The adjusted futures price will be arrived at by multiplying the old futures price by the adjustment factor (0.959548).
2. Market Lot: The adjusted market lot will be arrived at by dividing the existing market lot by the adjustment factor (0.959548). The revised market lot would be as under:
1300 (existing market lot) / 0.959548 (adjustment factor) = 1355 (revised market lot)
Trading Members are requested to download the contract master file on day of the adjustment for revised strike prices and market lot.
For any further clarifications, Trading members are requested to contact their designated Relationship Managers.
For and on Behalf of BSE Ltd.
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Ketan Jantre
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Sandeep Pujari
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Head – Trading Operations
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DGM – Trading Operations
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