Description

Early expiry of all existing Tata Motors F&O contracts on October 13, 2025 due to demerger; contracts to be reintroduced on October 14, 2025 after special pre-open session.

Summary

BSE has announced adjustments to Futures and Options contracts of Tata Motors Ltd (TAMO) due to a scheme of arrangement involving the demerger of Tata Commercial Vehicles Ltd. All existing F&O contracts will expire early on October 13, 2025, one day before the ex-date. New contracts will be reintroduced on October 14, 2025 after completion of a special pre-open call auction session.

Key Points

  • Record Date: October 14, 2025 for issuance of Tata Commercial Vehicles Ltd shares
  • Entitlement: 1 fully paid equity share of Rs. 2 each of Tata Commercial Vehicles Ltd for every 1 equity share of Rs. 2 each held in Tata Motors Ltd
  • Ex-Date: October 14, 2025
  • All existing Tata Motors F&O contracts will expire on October 13, 2025 (early expiry)
  • Contracts will be reintroduced from October 14, 2025 after special pre-open session
  • Minimum of 7 ITM, 1 ATM, and 7 OTM strikes will be available
  • Trading to commence at 10:00 AM on October 14, 2025

Regulatory Changes

No regulatory framework changes. This is a standard contract adjustment procedure as per BSE’s existing guidelines for corporate actions affecting derivatives contracts.

Compliance Requirements

  • Trading members must settle all existing Tata Motors F&O positions by October 13, 2025
  • Members should inform their clients about the early expiry of contracts
  • Members must be prepared for reintroduction of contracts based on post-auction pricing on October 14, 2025
  • Contact designated Relationship Managers for clarifications

Important Dates

  • October 7, 2025: Circular announcement date
  • October 13, 2025: All existing Tata Motors F&O contracts expire (early expiry)
  • October 14, 2025: Ex-date for scheme of arrangement
  • October 14, 2025: Special pre-open call auction session in equity segment
  • October 14, 2025, 10:00 AM: Reintroduction and commencement of trading in new F&O contracts

Impact Assessment

Market Impact: High - Forces closure of all existing derivative positions in Tata Motors before the ex-date, potentially causing significant volatility and liquidity pressure on October 13, 2025.

Trading Impact: All market participants with Tata Motors F&O positions must exit or roll their positions before October 13, 2025. Gap in derivatives trading availability until new contracts are introduced.

Operational Impact: Traders and risk managers need to recalibrate hedging strategies. The special pre-open session on October 14 will determine strike prices for new contracts, creating pricing uncertainty.

Strategic Considerations: Options sellers face assignment risk, futures holders must close positions, and algorithmic traders need to update their systems for the contract discontinuity.

Impact Justification

Early expiry of all F&O contracts on a major large-cap stock requires immediate action from all derivatives traders. Significant impact on hedging and trading strategies.