IMPLICATIONS OF DEMERGER IN TATA MOTORS LIMITED ON FUTURES AND OPTIONS

Tata Motors Limited is undergoing a corporate demerger, with the record date set as October 14, 2025. This reorganisation will separate the company’s passenger vehicles, EV, and Jaguar Land Rover businesses into Tata Motors Passenger Vehicles Ltd, while the commercial vehicle operations will be housed under TML Commercial Vehicles Ltd.

As a result of this corporate action, existing F&O contracts on Tata Motors will be impacted. Here is everything you need to know about expiry changes, contract reintroduction, margin requirements, settlement timelines, and how to manage your open positions on ICICI Direct.

Expiry of Existing Contracts:

All existing Tata Motors contracts with expiry dates of October 28, November 25, and December 30, 2025 will now expire early on October 13, 2025. These contracts will be physically settled if not squared off before market hours on October 13, 2025.

On ICICI Direct, clients can square off their positions on October 13, 2025. If you do not act, ICICI Direct systems will attempt closure automatically by:

a. 12:00 pm for long options

b. 2:30 pm for long/short futures and short options (unless marked for physical delivery).

Introduction of New Contracts:

From October 14, 2025, new derivatives contracts on TATA MOTORS will be re-introduced.  These contracts will have expiry dates of October 28, 2025, November 25, 2025, and December 30, 2025.

Option Strikes Availability:

On October 14, 2025, the range of option strikes available for trading will be based on the price discovered during the Special Pre-Open Session (SPOS) of the capital market segment.

Impact of Tata Motors demerger on open F&O positions  

For clients holding Tata Motors F&O contracts expiring on October 28, November 25, and December 30, 2025, please note:

a. These contracts will now expire early on October 13, 2025.

b. If not closed before market hours on October 13, they will be liable for physical settlement.

c. You can square off existing positions on ICICI Direct on October 13, 2025.

d. If you do not act, ICICI Direct systems will attempt to automatically close positions by:

i. 12:00 pm for long options

ii. 2:30 pm for long/short futures and short options

e. Automatic closure will not apply if you have already marked the position for physical delivery.

Process to mark TATA MOTORS Limited position for physical on ICICI Direct

From October 7, 2025, ICICI Direct will provide a new link called “Choose Delivery” on the Open Positions page. Clients must exercise this option by 11:00 am on October 13, 2025, if they wish to mark their Tata Motors contracts for physical settlement.

a. If you are long (long futures, short puts, or long calls):

Allocate equivalent cash of the contract value in your F&O fund allocation.

b. If you are short (short futures, long puts, or short calls):

Ensure sufficient free shares of Tata Motors are available in your demat account for delivery.

Clients who do not wish to take or give physical delivery must ensure that their open Tata Motors F&O positions are squared off on October 13, 2025.

Margins requirement for TATA MOTORS contracts for long options:

If Positions Cannot Be Squared Off on October 13, 2025

In the event that open positions cannot be squared off due to lack of liquidity, any in-the-money (ITM) option contracts will be assigned:

a. Long call options expiring ITM: The contract will be assigned, and if adequate funds are not available, delivery will be received from the exchange and liquidated on the following day. The corresponding profit or loss, along with statutory charges, will be passed to the client’s account.

b. Long put options expiring ITM: Clients will be required to deliver shares. If sufficient shares are not available in the demat account, the contract will move to auction. Any resulting loss will be debited, and any profit credited, to the client’s account.

Final Settlement Price & Timelines

a. The final settlement price of Tata Motors futures will be based on the last half-hour weighted average price on October 13, 2025.

b. Pay-in/Pay-out of MTM settlement: October 14, 2025 (T+1).

c. Physical settlement: October 15, 2025 (T+2).

NSE Circular

FAQS: Tata Motors Demerger| ICICI Direct