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13 May 2025, 08:20 AM
Adjustment of Futures and Options contracts of M&MFIN due to Rights issue
As per the circular (web), effective from May 14, 2025 (ex-date), the M&MFIN F&O contracts will be revised based on the rights adjustment factor.
Mahindra & Mahindra Financial Services Limited has decided to issue equity shares on a 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. 194 per equity share. Further, the company has fixed the ex-date as May 14, 2025, to determine the shareholders who will be eligible to apply for the issue.
Symbol: M&MFIN
Rights ratio: 1:8
Ex-date: May 14, 2024
Adjustments for Options Contracts:
Strike Price: The adjusted strike price shall be arrived at by multiplying the old strike price by the adjustment factor.
Market Lot: The adjusted market lot shall be arrived at by dividing the old market lot by the adjustment factor. The revised market lot would be 2056.
For example, assume you hold a position in M&MFIN 260 CE, the current lot size is 2000. On ex-date, the 260 CE will be adjusted to 252.93 CE (Strike Price: 260 * Adjustment Factor: 0.972812), and the lot size will be adjusted to 2056 (Current Lot Size: 2000 / Adjustment Factor: 0.972812).
Adjustments for Futures Contracts:
Futures price: The adjusted Futures base price shall be arrived at by multiplying the old Futures base price by the adjustment factor.
Market Lot: The adjusted market lot shall be arrived at by dividing the old market lot by the adjustment factor. The revised market lot would be 2056.
For example, assume you are holding a position in M&MFIN MAY Fut, and on pre-ex-date (May 14, 2025), futures close at 260, on ex-date the price will be adjusted to 252.93 (Price on pre-ex-date: 260 * Adjustment Factor: 0.972812), while the lot size will be adjusted to 2056 (Current lot size: 2000 / Adjustment Factor: 0.972812).
The above changes shall be effective from May 14, 2025.