STOCK SPLIT IN JUBILANT FOODWORKS LIMITED: IMPLICATIONS ON YOUR F&O POSITIONS

Jubilant Foodworks Limited has announced a stock split in the ratio of 5:1 i.e. if you are holding one share (face value of Rs.10) of Jubilant Foodworks, you will get 5 shares (Face value of Rs.2). The ex-date is 19 April 2022 for stock split.

What is Adjustment factor?

Adjustment factor for Stock split of A: B is defined as (A/B). Since the split ratio is 5:1, in this case the adjustment factor is (5/1) = 5,

What will happen to F&O open positions in Jubilant Foodworks Ltd?

On ex-date Futures price, Market lot & Options Strike will be adjusted as per above adjustment factor for the F&O contracts held by you expiring on April 28, May 26, and June 30.

What will be futures price on ex-date?

The revised futures price after ex-date will be Rs 571.20. The adjusted futures price is arrived by dividing the old futures price i.e. 2856 (closing price of 18 April 2022) by the adjustment factor of 5.

What will be the lot size on ex-date?

The revised market lot would be 625 after ex-date. The adjusted market lot is arrived at by multiplying the old market lot i.e. 125 by the adjustment factor i.e. 5.

What is impact on options strike price on ex-date?

The adjusted strike price is arrived at by dividing the old strike price by the adjustment factor

New strike prices introduced by exchange after ex-date for call & put will be

What is the impact on open positions options premium on ex-date?

Premium price will get divided by adjustment factor of 5.

Example: You are holding 580 call options @ Rs. 50 before ex-date.

After ex-date it will be Rs.10. So cost of acquisition will change from Rs.50 to Rs.10.

When will the F&O lot size gets revised & where to see in ICICIdirect platform?

Before ex-date, ICICI direct will do the needful changes for clients having open positions. You can check the same in F&O order book on ex-date.

What will be the freeze quantity after ex-date?

The revised Quantity Freeze limit for contracts of Jubilant Foodworks will be 31250.

Will the margins change for F&O open position?

No, Margins will not change for open position held due to corporate action. It will be as per exchange requirements.

What will happen to existing shareholders? 

If you are holding one share (face value of Rs.10) of Jubilant Foodworks you will get 5 shares (Face value of Rs.2). The ex-date is 19 April 2022 for stock split & record date is 20 April 2022.

What will be the impact on MTF open position after ex-date?

Client will continue to hold MTF position as is & will be required to maintain requisite margin. After ex-date client will get the benefit of stock split.

When will the stock be credited in your account?

The shares will get credited on same day.

Jubilant Foodworks Limited company profile:

Jubilant Foodworks Ltd is in the Quick Service Restaurant sector having the Market Capitalization of worth Rs. 37,085 crores, it is incorporated in the year 1995.

Jubilant Foodworks Limited is a food service company based in Noida. Jubilant Foodworks Ltd was incorporated under the name of Domino’s Pizza India Private Limited and was later renamed to its current name in 2009. In 2011, Jubilant Foodworks entered into a franchise agreement with an American coffee house chain named Dunkin’ Donuts to work the brand in India. Subsequently, in April’2012, it opened the first Dunkin’ Donuts outlet in India at Connaught Place, Delhi. Jubilant Foodworks holds the master franchisee for Domino’s Pizza in India, Nepal, Sri Lanka, and Bangladesh. Jubilant Foods acquired a 10.76% stake in Barbeque Nation Hospitality Limited. Jubilant Foodworks has also started its first home grown brand called Hong’s Kitchen, offering Chinese food to its customers. The promoters of the company own 41.94% of the stake in the company, Foreign Institutional Investors (FII) own 41.72%, Domestic Institutional Investors (DII) own 10.76% of the stake, and others (such as public and retail investors) hold the balance of 0.22%. 

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