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07 Sep 2023, 06:00 PM
Adjustment of F&O contracts of POWERGRID on account of bonus.
As per the circular(web), effective from September 12th, 2023 the POWERGRID F&O contracts will be revised based on the bonus adjustment factor.
Calculation of the adjustment factor: Adjustment factor for Bonus issue of A:B is defined as (A+B)/B. In the case of POWERGRID, the adjustment factor is (1+3)/3 = 1.333333 since the bonus issue ratio is 1:3.
Adjustment for Futures Contracts:
Futures base price: The adjusted futures base price will be arrived at by dividing the settlement price of the future one day before the ex-date by the adjustment factor.
Futures lot size: The adjusted market lot will be arrived at by multiplying the old market lot by the adjustment factor. The revised market lot would be 3600.
For example: Assume you are holding a position in POWERGRID Futures and on pre-ex-date (September 11th, 2023) futures close at 250, on ex-date the price will be adjusted to 187.5 (Price on pre-ex-date: 250 / Adjustment Factor: 1.333333), while the lot size will be adjusted to 3600 (Current lot size: 2700 * Adjustment Factor: 1.333333).
Adjustment for Options Contracts:
Strike Price: The adjusted strike price will be arrived at by dividing the old strike price by the adjustment factor.
Lot Size: The adjusted lot size will be arrived at by multiplying the old market lot by the adjustment factor. The revised lot size would be 3600.
For example: Assume you hold a position in POWERGRID 200 CE, the current lot size is 2700. On ex-date, the 200 CE will be adjusted to 150 (Strike Price 200 / Adjustment Factor 1.333333) and the lot size will be adjusted to 3600 (Current Lot Size: 2700 * Adjustment Factor 1.333333).
Also, if you hold equity shares of POWERGRID in your demat account as of September 12th, 2023 (ex-date) you will be entitled to receive the bonus shares which will be credited to your demat account usually within 15 – 20 days from the record date.