Description
NSE Clearing announces adjustment procedures for F&O contracts in KOTAKBANK due to face value split from Rs.5 to Rs.1 per share, effective January 14, 2026.
Summary
NSE Clearing Limited has announced the adjustment procedure for Futures and Options contracts in KOTAK MAHINDRA BANK LIMITED (KOTAKBANK) following the face value split from Rs.5 per share to Rs.1 per share. The adjustment factor is 5, and the ex-date for the corporate action is January 14, 2026. All open F&O positions existing after end of day on January 13, 2026 will be adjusted according to specified procedures.
Key Points
- Adjustment factor: 5 (reflecting 5:1 stock split)
- Ex-date: January 14, 2026
- All open futures and options positions will be adjusted after EOD on January 13, 2026
- Futures positions will be multiplied by adjusted market lot
- Futures prices will be divided by adjustment factor (5)
- Options strike prices will be divided by adjustment factor (5)
- Adjusted positions will be carried forward at adjusted value to avoid rounding differences
- Normal mark-to-market settlement procedures resume from January 14, 2026
Regulatory Changes
This circular implements adjustment procedures in pursuance of:
- NSCCL Byelaws pertaining to Clearing and Settlement of deals
- SEBI circular SMDRP/DC/CIR-8/01 dated June 21, 2001
- NSE Circular no. 043 (Download no. NCL/CMPT/67750) dated April 29, 2025
- NSE Circular no. 223/2025 (Download no. NSE/FAOP/72049) dated December 29, 2025
Compliance Requirements
For Futures Contracts:
- Adjusted positions calculated by multiplying pre-adjusted contracts by adjusted market lot
- Adjusted futures price = Settlement price on January 13, 2026 ÷ 5
- Carry forward value = Pre-adjusted quantity × Pre-adjusted settlement price
- All positions marked-to-market on January 13, 2026 based on daily settlement price
- Begin-of-day margins on January 14, 2026 computed based on adjusted carry forward value
- Intra-day margins computed based on traded prices
For Options Contracts:
- Adjusted strike price = Old strike price ÷ 5
- All open positions as of January 13, 2026 will be adjusted
Example Adjustment (Futures):
- Pre-adjustment: 400 contracts long position
- Post-adjustment: 2,000 contracts long position (400 × 5)
Important Dates
- January 13, 2026: Last day before adjustment; positions marked-to-market at pre-adjustment prices
- January 14, 2026: Ex-date for corporate action; adjusted positions effective; normal MTM procedures resume
Impact Assessment
Market Impact: High - All market participants with open F&O positions in KOTAKBANK must understand the adjustment mechanics to correctly assess their positions post-split.
Operational Impact: High - Trading members and clearing members must ensure their systems correctly reflect the 5x adjustment in contract quantities and proportional reduction in prices and strike prices.
Risk Management Impact: Critical - Margin calculations will change significantly as contract sizes increase 5-fold while prices decrease proportionally. Position limits and exposure calculations need recalibration.
Trading Impact: The adjusted market lot (as per Circular 223/2025) will affect minimum trading quantities and position sizing strategies for all KOTAKBANK derivatives traders.
Impact Justification
Mandatory adjustment of all open F&O positions in KOTAKBANK with 5x adjustment factor affecting contract sizes, strike prices, and settlement values for all market participants