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New Circular from NSE on TATACONSUM Rights Adjustment

The National Stock Exchange of India Limited (NSE) has released a circular detailing adjustments to the futures and options contracts for TATA Consumer Products Limited (TATACONSUM). These changes follow the announcement of a rights issue and comply with SEBI guidelines.

Adjustments to TATACONSUM Contracts

Overview of Adjustments The adjustments have been made in response to the rights issue declared by TATA Consumer Products Limited. These modifications will be effective from July 26, 2024.

Key Details:

• Symbol: TATACONSUM
• Company Name: TATA Consumer Products Limited
• Type of Corporate Action: Rights Issue
• Face Value: Rs 1/-
• Ratio: 1:26
• Issue Price: Rs 818
• Ex-date & Effective Date: July 26, 2024
• Adjustment Factor: 0.987723
• Adjusted Revised Market Lot: 456
• Revised Quantity Freeze Limit: 18240

Revised Option Strike Prices: Refer to the NSE website for a detailed list of revised strike prices.

Additional Important Points

Effective Dates and Procedures

• The changes will be effective from the specified ex-date.
• Revised options strike/futures base prices and lot sizes will be rounded off to the nearest tick size and integer respectively.
• Updated contract and spread files must be loaded on trading applications before trading on the ex-date.

Files and Links:

• Contract files can be obtained from the faoftp/faocommon directory on the Extranet server.
• MII contract and spread files are also available on the NSE website here.

Position Adjustments

• The methodology for position adjustments will be separately communicated by the respective Clearing Corporation.

Calculation Example

Adjustment Factor Calculation:

• Underlying Close Price (P): Rs 1223.60
• Issue Price of Rights (S): Rs 818
• Rights Entitlement (A): 1
• Number of Existing Shares (B): 26
• Total Entitlement (A+B): 27
• Benefit per Right Entitlement (C): (P - S) x A = 405.6
• Benefits per Share (E): E = C / (A+B) = 15.02222222
• Adjustment Factor (AF): AF = (P - E) / P = 0.987723

For more detailed calculation examples, refer to Annexure-1 in the circular.

Conclusion

These adjustments ensure that the trading of TATA Consumer Products Limited's futures and options contracts remains fair and in line with market regulations following the corporate action. Traders are advised to review the revised strike prices and adjustment details thoroughly.