The Board of Administrators of Energy Grid Company of India Ltd (POWERGRID) in its assembly held on July 31, 2023, introduced the difficulty of bonus shares within the ratio of 1:3 (1 fairness share of the corporate for each 3 fairness shares held). The ex-date being September 12, 2023.
On account of POWERGRID saying the difficulty of bonus shares, the Futures and Choices contracts in POWERGRID will likely be adjusted in line with the framework prescribed by SEBI. The adjustment will likely be each in Strike Worth and Lot Measurement of Choices and Worth and Lot Measurement of the Futures contract. You possibly can test the announcement from the alternate right here.
SEBI has prescribed a framework to the exchanges for adjustment of company actions in spinoff contracts on the time of the company motion. The alternate has printed all the pieces relating to the changes within the case of company actions right here. The changes are carried out in such a means that the worth of the place of the market individuals, on the cum and ex-dates for the company motion, proceed to stay the identical so far as attainable.
Calculation of the adjustment issue:
The adjustment issue for the Bonus situation of A: B is outlined as (A+B)/B. Within the case of POWERGRID, the adjustment issue is (1+3)/3 = 1.33333 because the bonus situation ratio is 1:3.
Adjustment for Choices Contracts:
Strike Worth: The adjusted strike value is arrived at by dividing the outdated strike value by the adjustment issue.
Lot Measurement: The adjusted lot dimension is arrived at by multiplying the outdated market lot by the adjustment issue. The revised lot dimension could be 3600.
Assume you maintain a place in POWERGRID 200 CE, the present lot dimension is 2700. On ex-date, the 200 CE will likely be adjusted to 150 (Strike Worth 200 / Adjustment Issue 1.33333) and the lot dimension will likely be adjusted to 3600 (Present Lot Measurement: 2700 * Adjustment Issue 1.33333).
Futures base value: The adjusted futures base value is arrived at by dividing the settlement value of the long run in the future earlier than the ex-date by the adjustment issue.
Futures lot dimension: The adjusted market lot will likely be arrived at by multiplying the outdated market lot by the adjustment issue. The revised market lot could be 3600.
Assume you might be holding a place in POWERGRID SEP FUT and on pre-ex-date (September 11, 2023) futures shut at 250, on ex-date the worth will likely be adjusted to 187.5 (Worth on pre-ex-date: 250 / Adjustment Issue: 1.33333)
Whereas the lot dimension will likely be adjusted to 3600 (Present lot dimension: 2700 * Adjustment Issue: 1.33333).
Holders of F&O contracts will not be eligible for company motion advantages.
If you’re holding fairness shares of POWERGRID on ex-date (September 12, 2023) you can be eligible to obtain the bonus shares. The credit score of shares can take as much as 15 days from the report date (September 12, 2023). You possibly can be taught extra about this right here.
You possibly can be taught extra about what bonus situation is right here: