NATIONAL STOCK EXCHANGE OF INDIA LIMITED
FUTURES & OPTIONS SEGMENT
CIRCULAR
Circular No: NSE/F&O/109/2008 October
6, 2008
Download No: NSE/FAOP/11437
Dear Members,
Subject: Adjustment of Futures and Options contracts in the
security DISHTV
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, the members are informed of the following methodology
for adjustment:
Corporate action:
Dish TV India Limited has informed
the Exchange that the Board of Directors of the Company, at its meeting held on
October 03, 2008 has fixed October 16, 2008 as the record date for reckoning
the eligible shareholders who are entitled to apply for equity shares to be
issued on rights basis in the ratio of 121 equity shares for every 100 equity
shares of Re. 1/- each for cash at a premium of Rs. 21/- per equity share
aggregating to Rs. 113,992.91 Lakhs.
The issue price for the Equity Shares will be payable in 2 (two) installments;
50% issue price will be paid on application and balance 50% will become payable
at the options of the Company.
Symbol : DISHTV
Rights ratio : 121:100
Record Date : October 16, 2008
Ex-date : October 8, 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.
Adjustments for Futures Contracts:
An
example for deriving the adjustment factor, revised strike/future base price
and lot size is given in Annexure – 1.
The methodology for position adjustments shall be separately
intimated by NSCCL.
Members are requested to load the
following files in the NEATFO software before trading on October 8, 2008.
1. Security.gz
2. Contract.gz
These files can be obtained from the directory faoftp/faocommon in the Extranet server.
The details of the revised option strike prices, futures
prices and lots size based on the actual underlying price shall be informed to
members separately on October 7, 2008.
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): 26.10#
Issue price of the rights (S) : 22
Adjustment factor:
Number
of Existing shares = 100
Rights
Entitlement
(Rights
to subscribe) = 121
Total
Entitlement = 221
Benefit
per Right Entitlement
=
(P – S) x Rights Entitlement
=
(26.10 – 22) x 121 = Rs.496.10
Benefits
per share (E)
=
(496.10 / 221) = 2.2447
Hence,
Adjustment Factor is
=
(P-E)/P
=
(26.10-2.2447) / 26.10
= 0.913992
Option
contracts before adjustment:
|
Instrument |
Symbol |
Expiry date |
Strike |
Type |
Market Lot |
|
OPTSTK |
DISHTV |
29-OCT-2008 |
20.00 |
CA |
5150 |
|
OPTSTK |
DISHTV |
29-OCT-2008 |
22.50 |
PA |
5150 |
|
OPTSTK |
DISHTV |
29-OCT-2008 |
25.00 |
CA |
5150 |
|
OPTSTK |
DISHTV |
29-OCT-2008 |
27.50 |
PA |
5150 |
Options
contracts after adjustment:
|
Instrument |
Symbol |
Expiry date |
Strike |
Type |
Market Lot |
|
OPTSTK |
DISHTV |
29-OCT-2008 |
18.30 |
CA |
5635 |
|
OPTSTK |
DISHTV |
29-OCT-2008 |
20.55 |
PA |
5635 |
|
OPTSTK |
DISHTV |
29-OCT-2008 |
22.85 |
CA |
5635 |
|
OPTSTK |
DISHTV |
29-OCT-2008 |
25.15 |
PA |
5635 |
Futures
contract before adjustment:
|
Instrument |
Symbol |
Expiry date |
Market Lot |
Futures Base Price# |
|
FUTSTK |
DISHTV |
29-OCT-2008 |
5150 |
26.35 |
Futures
contract after adjustment:
|
Instrument |
Symbol |
Expiry date |
Market Lot |
Futures Base Price# |
|
FUTSTK |
DISHTV |
29-OCT-2008 |
5635 |
24.10 |
The
revised strike/futures prices and the lot size on account of adjustment would
appear in decimal places. The strike/futures prices shall be rounded off to the
nearest tick size and the lot size shall be rounded off to the nearest
integer.
# The price
is only an indicative value for the purpose of example.