Description

Adjustment of F&O contracts for Tata Motors Limited due to scheme of arrangement (demerger) effective October 14, 2025, with new lot size of 800 and modified strike schemes.

Summary

NSE has announced adjustments to Futures and Options contracts of Tata Motors Limited (TATAMOTORS) pursuant to a scheme of arrangement (demerger). The changes will be effective from October 14, 2025, with a new lot size of 800 shares. Trading in F&O contracts will resume at 10:00 AM on the ex-date following the special pre-open call auction session (SPOS) in the Capital Market segment. New futures contracts for October, November, and December 2025 expiries will be available, along with spread combination contracts.

Key Points

  • Corporate action type: Scheme of Arrangement (Demerger)
  • Ex-date and effective date: October 14, 2025
  • New lot size: 800 shares
  • Trading resumes at 10:00 AM on ex-date after SPOS completion
  • New futures contracts available for 28-OCT-2025, 25-NOV-2025, and 30-DEC-2025 expiries
  • Futures spread combinations available: OCT25NOV25 and NOV25DEC25
  • Strike scheme varies by expiry: Near Month (10 step value, 7 strikes), Mid Month (10 step value, 7 strikes), Far Month (20 step value, 4 strikes)
  • Strike prices range from 10 to 1320 depending on price discovery and expiry month
  • Members must load updated contract.gz and spd_contract.gz files before trading on ex-date

Regulatory Changes

The adjustments are made in pursuance of SEBI guidelines for futures and options contract adjustments on announcement of corporate actions. The strike scheme methodology applies different step values and number of strikes based on contract expiry:

  • Near Month and Mid Month Expiries: Step value of 10 with 7 strikes available
  • Far Month Expiry: Step value of 20 with 4 strikes available

Strike prices will be determined based on price discovered in the SPOS session of the Capital Market segment. Additional strike prices may be made available during the day based on price movement.

Compliance Requirements

  • Trading Members: Must load updated contract.gz and spd_contract.gz files from the faoftp/faocommon directory on Extranet server before trading on October 14, 2025
  • Failure to update: If latest files are not loaded, contracts cannot be set up in trading terminals and members will not be able to trade or view security details
  • File Access: Files available on Extranet server in specified directory
  • Trading Setup: Ensure trading terminals are configured with new contract specifications before market opening on ex-date

Important Dates

  • October 13, 2025: Circular issued
  • October 14, 2025: Ex-date and effective date for scheme of arrangement
  • 10:00 AM, October 14, 2025: Trading in adjusted F&O contracts commences (post-SPOS)
  • Futures Expiries: 28-OCT-2025, 25-NOV-2025, 30-DEC-2025

Impact Assessment

Market Impact: High - This demerger adjustment affects all existing futures and options positions in Tata Motors, one of India’s largest automotive companies. The change in lot size from previous specifications to 800 shares will require position adjustments and margin recalculations for all market participants holding F&O positions.

Operational Impact: Critical for trading members who must update their systems before market opening on October 14, 2025. Failure to load updated contract files will result in inability to trade or view contract details, potentially causing operational disruptions.

Trading Impact: The availability of 70+ option strike prices (ranging from 10 to 1320) across different expiry months provides extensive trading opportunities. However, actual available strikes will depend on price discovery during SPOS session. The introduction of new futures spread combinations (OCT25NOV25 and NOV25DEC25) enables calendar spread strategies.

Risk Management: Existing position holders need to understand contract adjustments, monitor margin requirements, and assess impact on hedging strategies due to the demerger and modified contract specifications.

Impact Justification

Critical adjustment to F&O contracts due to demerger affecting all existing positions, lot size changes, and strike price modifications for a major stock