Description

BSE announces adjustments to F&O contracts of Kotak Mahindra Bank due to 5:1 stock split with record date January 14, 2026. Strike prices will be divided by 5 and market lot will be multiplied by 5.

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 5:1 stock split. The record date for the subdivision of equity shares from Rs. 5 each to Rs. 1 each is January 14, 2026. All F&O contract adjustments will be implemented at end of day on January 13, 2026, with ex-date being January 14, 2026.

Key Points

  • Stock split ratio: 5:1 (One equity share of Rs. 5 subdivided into Five equity shares of Rs. 1 each)
  • Adjustment factor: 5
  • Record date: January 14, 2026
  • Adjustment implementation date: End of day January 13, 2026
  • Ex-date: January 14, 2026
  • All existing F&O positions will be automatically adjusted
  • Strike prices will be divided by 5
  • Market lot will be multiplied by 5 (from 400 to 2000)
  • Positions will be multiplied by 5
  • Futures prices will be divided by 5

Regulatory Changes

This adjustment is implemented in pursuance of SEBI guidelines for adjustment of Futures & Options Contracts on announcement of corporate actions. The exchange is mandated to make necessary adjustments to ensure fair continuation of derivative contracts following stock splits.

Compliance Requirements

For Trading Members:

  • Be aware of automatic adjustments to all KOTB F&O contracts
  • Update systems and risk management tools to reflect new contract specifications
  • Inform clients holding KOTB derivative positions about the adjustments
  • Contact designated Relationship Managers for any clarifications

Contract Adjustments:

Strike Price Adjustment:

  • Existing strike prices divided by adjustment factor (5)
  • Example: Strike 2100 becomes 420, Strike 2120 becomes 424, Strike 2140 becomes 428, Strike 2160 becomes 432

Market Lot Adjustment:

  • Existing market lot (400) multiplied by adjustment factor (5)
  • Revised market lot: 2000 shares per contract

Position Adjustment:

  • All existing positions multiplied by adjustment factor (5)

Futures Price Adjustment:

  • Existing futures prices divided by adjustment factor (5)
  • Adjusted prices rounded to nearest tick size

Important Dates

  • January 13, 2026: Adjustments to be implemented at end of day
  • January 14, 2026: Record date for stock split; Ex-date for adjusted contracts

Impact Assessment

Market Impact:

  • High impact on all traders holding Kotak Mahindra Bank F&O positions
  • Automatic 5x increase in number of contracts held (due to position multiplication)
  • Significant change in strike price granularity (all strikes divided by 5)
  • Market lot increases from 400 to 2000 shares per contract
  • No change in total notional value of positions (adjustment is value-neutral)

Operational Impact:

  • Trading systems must accommodate new strike prices and lot sizes
  • Margin requirements will adjust automatically based on new contract specifications
  • Risk management systems need updates for new contract parameters
  • Client reporting systems must reflect adjusted positions accurately

Trader Considerations:

  • Existing positions remain economically equivalent after adjustment
  • Option strategies (spreads, straddles, etc.) will be adjusted proportionally
  • Premium values will be adjusted to reflect new strike prices and lot sizes
  • Open interest will be redistributed across new strike prices

Impact Justification

Major corporate action affecting all F&O positions in Kotak Mahindra Bank with significant strike price and lot size adjustments that directly impact all derivative traders holding positions