Description

BSE announces adjustments to F&O contracts of Kotak Mahindra Bank following 1:5 stock split with record date January 14, 2026.

Summary

BSE has announced mandatory adjustments to all Futures and Options contracts of Kotak Mahindra Bank Ltd (Scrip Code: 500247, Derivatives Asset Code: KOTB) following the company’s 1:5 stock split. The adjustments will be implemented at end of day on January 13, 2026, with the ex-date being January 14, 2026. Each equity share of Rs. 5 will be subdivided into five equity shares of Rs. 1 each.

Key Points

  • Adjustment factor: 5 (based on 5:1 stock split ratio)
  • Strike prices will be divided by 5 (e.g., 2100 becomes 420)
  • Market lot will be multiplied by 5 (existing 400 becomes 2000)
  • Futures prices will be divided by 5 and rounded to nearest tick size
  • All positions will be multiplied by 5
  • Adjustments comply with SEBI guidelines for corporate actions

Regulatory Changes

No new regulatory changes introduced. The circular implements existing SEBI guidelines for adjustment of Futures & Options contracts on announcement of corporate actions, specifically stock splits.

Compliance Requirements

  • Equity Derivatives Segment members must note the automatic adjustments
  • Trading members should contact designated Relationship Managers for clarifications
  • All existing F&O contracts will be automatically adjusted by the exchange
  • Traders must account for revised strike prices, market lots, and positions in their trading strategies

Important Dates

  • January 2, 2026: Notice date
  • January 13, 2026: Adjustment implementation date (end of day)
  • January 14, 2026: Record date and ex-date for stock split

Impact Assessment

High impact on derivatives market participants holding KOTB contracts. All active futures and options positions will undergo systematic adjustments including:

  • Strike price reduction by factor of 5 increases granularity of available strikes
  • Market lot increase from 400 to 2000 shares maintains contract value but changes position sizing
  • Existing positions multiply by 5, maintaining economic exposure but changing contract count
  • Traders must recalibrate margin requirements and risk management parameters
  • Potential for temporary volatility during adjustment period
  • Enhanced liquidity expected post-split with lower strike price intervals

Impact Justification

Significant corporate action requiring mandatory adjustments to all existing F&O contracts with specific calculation methodology affecting active derivative traders