IMPLICATIONS OF CORPORATE ACTIONS IN BAJAJ FINANCE LIMITED

Bajaj Finance Limited has announced a bonus share in the ratio 4:1 and stock spilt in ratio 2:1. The Company has fixed Monday, June 16, 2025 as the Record Date.

Adjustment factor for Bonus share of A: B is defined as (A+B)/B.

In the case of BAJAJ Finance, the adjustment factor is (4+1)/1 = 5

Adjustment factor for Stock split of A: B is defined as (A/B).

In the case of BAJAJ Finance, the adjustment factor is (2/1) = 2, since the split ratio is 2:1.

So, the final adjustment factor for the BAJAJ FINANCE will be 2*5= 10

Following adjustments will be made for Futures and Options:

FOR OPTIONS:

Strike Price: The adjusted strike price will be arrived at by dividing the old strike price by the adjustment factor i.e., 10.

Lot Size: The adjusted lot size will be arrived at by multiplying the old market lot by the adjustment factor.

Old lot size=125

Adjustment factor = 10

New lot size = 125*10 = 1250

Note: The lot size for the contracts expiring 31^st July onwards are also undergoing change from 75 to 750 as per the exchange circular on Revision in Market Lot of Derivative Contracts on Individual Stocks 

Value of Position:

Pre-bonus Value of Options: ₹1500 (premium) × 125 (shares) = ₹187,500

Post-bonus Value of Options: ₹150 (premium) × 1250 (shares) = ₹187,500

Like the the notional value of your options position remains the same at ₹187,500.

FOR FUTURES:

You can calculate the new future price as follow:

= (Closing price / Adjustment factor) *New lot size 

= (Closing price / 10) * 1250

Impact on your existing Futures and Options position:

IN FUTURES

Positions before adjustment:

Positions after adjustment:

IN OPTIONS

Positions before adjustment:

Positions after adjustment

Key consideration – There will be no change in your overall exposure or margin requirement. The price decreases and the lot size increase, keeping the contract value constant.

Frequently Asked Questions:

1. What will happen to F&O open positions in Bajaj Finance Limited?

For clients holding F&O contracts expiring on 26th June, 2025, 31st July, 2025 and 28th August 2025: These contracts shall expire on respective expiries & will be adjusted according to the framework prescribed by SEBI. The adjustment for Futures will be Price and Lot Size & for Options will be Strike Price and Lot Size and option premium.

2. What is the impact on my mark to market settlement?

Since the futures price will be adjusted, clients' MTM values will also reflect this change. However, the overall position in value terms should remain neutral because both the price and the lot size change in proportion.

3. Will the open interest change after the corporate action, and how is it adjusted?

The open interest in terms of the number of contracts or lots held remains the same, but the actual number of shares in each contract changes. So, while the contract count doesn't change, the shares per contract do, ensuring the overall position value is unaffected.

4. Is there any change in margin requirements due to the corporate action?

Typically, the margin requirements are adjusted to reflect the new lot size and contract price. Since the value of the position remains the same, there is no significant change in the total margin required. However, brokers may notify any minor adjustments for operational purposes.

5. What is the margin required for revised BAJAJ FINACE LIMITED contracts?

Margin will be as per the exchange rule of SPAN + ELM

6. How do F&O expiries get adjusted after a corporate action?

The expiry dates of F&O contracts remain the same; only the price and lot size adjustments take place. No changes are made to the expiry or contract duration due to the split.

7. Can I carry over my existing F&O positions post-split and bonus, or do I need to take any action?

Yes, you can carry over your existing F&O positions post-split and bonus. The exchange automatically adjusts the strike price, lot size, and contract terms, so you don’t need to take any specific action. However, it’s essential to monitor any notifications from your broker or the exchange for smooth handling of the adjustment.

8. When will the adjustment be reflected?

The adjustments in F&O positions will be made by the exchange at the time of the ex- date. The expected changes to be seen one day before ex-date i.e. 14^th June ,2025

9.  What happens if I exit my position before the ex- date?

If you exit F&O position before the ex-spilt date, they will not be affected by the bonus       adjustment. The exit will occur at the market prices prior to the adjustment

10. How one can check corporate action while having an open position?

It is shown in order book in offline mode. The changes will reflect before the execution date, on your F&O open position as shown in example below:

11. Will it impact my profit / losses?

No, it does not affect your profit and losses as the contract value remains unchanged.

12. What will be the impact on portfolio?

The portfolio will show the following transactions.

Adjustments in portfolio are shown as below taking an example of the CANBAN contract

For Example - 550-PE, 540-PE, 520-PE strikes is valued at 110-PE, 108-PE, 104-PE respectively    as shown above in portfolio details.

Transactions will show the price adjustment at ₹0.05 with adjusted strike price with adjusted lot size as shown below:

Your total position value is unaffected; it's just the numerical parameters (strike price, lot size, and premium) that are adjusted accordingly. One can exit its position partially as the number of lot size is increased.

In summary, the stock split and bonus issue only adjust the numerical values of strike prices, lot sizes, and premiums while keeping the overall value of F&O positions unchanged.

It is advised to monitor your F&O positions in BAJAJ FINACE LIMITED and take timely action. 

NSE CIRCULAR:Circular ,  NSE circular