NATIONAL STOCK EXCHANGE OF INDIA LIMITED

FUTURES & OPTIONS SEGMENT

CIRCULAR

 

Circular No: NSE/F&O/092/2008                                                      September 8, 2008                               

Download No: NSE/FAOP/11255

 

Dear Members,

 

 

Subject: Adjustment of Futures and Options contracts in the security TATAMOTORS

 

In pursuance of the principles prescribed by SEBI for adjustments to futures and options contracts on announcement of corporate action of rights shares and after due consultation with the other Exchange, and in continuation of our circular NSE/F&O/090/2008 dated September 6, 2008, the members are informed of the following methodology for adjustment:

 

Corporate action:

 

Tata Motors Limited has informed the Exchange that: "The Company would determine detailed terms of the proposed Rights Issue of Ordinary Shares and 'A' Ordinary Shares aggregating upto Rs.4,200 crores, including the issue price on September 02, 2008."  The Committee of Directors of Tata Motors Limited approved the terms of simultaneous and unlinked issue of:

  1.  Ordinary Shares on a Rights basis in the ratio of 1 (one) Ordinary Share for every 6 (six) shares held.  The Ordinary Shares would be issued at a price of Rs.340/- per share of face value of Rs.10/- each aggregating Rs.2186 crores, and
  2. ‘A’ Ordinary Shares on a Rights basis in the ratio of 1 (one) Ordinary Share for every 6 (six) shares held.  The ‘A’ Ordinary Shares would be issued at a price of Rs.305/- per share of face value of Rs.10/- each aggregating Rs.1961 crores

Tata Motors Limited has further informed the Exchange that the record date for purpose of the rights issue entitlement has been fixed as under:- Record Date: September 16, 2008; Purpose: Determining the eligibility of Shareholders for the Simultaneous and Unlinked Rights Issue of Ordinary shares and 'A' Ordinary Shares aggregating Rs. 4,147 crores.

 

Adjustments for equity share portion of Rights (Part 1) will be carried out as follows:

 

Symbol            : TATAMOTORS

Rights ratio     : 1:6

Record Date    : September 16, 2008

Ex-date           : September 9, 2008

 

Adjustments for Options Contracts:

 

1.      Strike Price: The adjusted strike price shall be arrived at by multiplying the old strike price by the adjustment factor.

2.      Market Lot: The adjusted market lot shall be arrived at by dividing the old market lot by the adjustment factor. The revised market lot would be 425.

 

Adjustments for Futures Contracts:

 

  1. Futures base Price: The adjusted Futures base price shall be arrived at by multiplying the old Futures base price by the adjustment factor.
  2. Market Lot: The adjusted market lot shall be arrived at by dividing the old market lot by the adjustment factor. The revised market lot would be 425.

 

The methodology for position adjustments has been separately intimated by NSCCL.

 

The above changes shall be effective from September 9, 2008

 

Members are requested to load the following files in the NEATFO software before trading on September 9, 2008.

 

1.      Security.gz

2.      Contract.gz

  

These files can be obtained from the directory faoftp/faocommon on the Extranet server.

 

The details of the revised option strike prices available for trading in the security TATAMOTORS on September 9, 2008 is given in Annexure I.

 

For any clarifications, members are advised to contact the following officials:

Mr. Sachin Dhar and Mr. Janardhan Gujaran at 022-26598151 and 022-26598152.

 

For and on behalf of

National Stock Exchange of India Limited

 

 

Suprabhat Lala

Asst. Vice President


Annexure – 1

Underlying close price on the last cum date (P): 436.45

Issue price of the rights (S)     : 340

 

Adjustment factor:

 

Number of Existing shares        =   6

Rights Entitlement

(Rights to subscribe)                 =   1

Total Entitlement                      =   7

 

Benefit per Right Entitlement

= (P – S)

= (436.40 – 340) = Rs.96.45

 

Benefits per share (E)

= (96.45/7) = 13.77857

 

Hence, Adjustment Factor is

= (P-E)/P

= (436.45-13.77857) / 436.45

 

= 0.968430

 

 

The revised strike/futures prices and the lot size on account of adjustment would appear in decimal places. The strike/futures prices are rounded off to the nearest tick size and the lot size is rounded off to the nearest integer. 

 

Instrument

Symbol

Expiry

Existing strike price

Revised strike price

OPTSTK

TATAMOTORS

25-Sep-08

350

338.95

OPTSTK

TATAMOTORS

25-Sep-08

360

348.65

OPTSTK

TATAMOTORS

25-Sep-08

370

358.30

OPTSTK

TATAMOTORS

25-Sep-08

380

368.00

OPTSTK

TATAMOTORS

25-Sep-08

390

377.70

OPTSTK

TATAMOTORS

25-Sep-08

400

387.35

OPTSTK

TATAMOTORS

25-Sep-08

410

397.05

OPTSTK

TATAMOTORS

25-Sep-08

420

406.75

OPTSTK

TATAMOTORS

25-Sep-08

430

416.40

OPTSTK

TATAMOTORS

25-Sep-08

440

426.10

OPTSTK

TATAMOTORS

25-Sep-08

450

435.80

OPTSTK

TATAMOTORS

25-Sep-08

460

445.50

OPTSTK

TATAMOTORS

25-Sep-08

470

455.15

OPTSTK

TATAMOTORS

25-Sep-08

480

464.85

OPTSTK

TATAMOTORS

25-Sep-08

490

474.55

OPTSTK

TATAMOTORS

25-Sep-08

500

484.20

OPTSTK

TATAMOTORS

25-Sep-08

510

493.90

OPTSTK

TATAMOTORS

25-Sep-08

520

503.60

OPTSTK

TATAMOTORS

29-Oct-08

370

358.30

OPTSTK

TATAMOTORS

29-Oct-08

380

368.00

OPTSTK

TATAMOTORS

29-Oct-08

390

377.70

OPTSTK

TATAMOTORS

29-Oct-08

400

387.35

OPTSTK

TATAMOTORS

29-Oct-08

410

397.05

OPTSTK

TATAMOTORS

29-Oct-08

420

406.75

OPTSTK

TATAMOTORS

29-Oct-08

430

416.40

OPTSTK

TATAMOTORS

29-Oct-08

440

426.10

OPTSTK

TATAMOTORS

29-Oct-08

450

435.80

OPTSTK

TATAMOTORS

29-Oct-08

460

445.50

OPTSTK

TATAMOTORS

29-Oct-08

470

455.15

OPTSTK

TATAMOTORS

29-Oct-08

480

464.85

OPTSTK

TATAMOTORS

27-Nov-08

390

377.70

OPTSTK

TATAMOTORS

27-Nov-08

400

387.35

OPTSTK

TATAMOTORS

27-Nov-08

410

397.05

OPTSTK

TATAMOTORS

27-Nov-08

420

406.75

OPTSTK

TATAMOTORS

27-Nov-08

430

416.40

OPTSTK

TATAMOTORS

27-Nov-08

440

426.10

OPTSTK

TATAMOTORS

27-Nov-08

450

435.80

OPTSTK

TATAMOTORS

27-Nov-08

460

445.50

OPTSTK

TATAMOTORS

27-Nov-08

470

455.15