As per SEBI guidelines for adjustments to F&O contracts in case of announcement of corporate actions (Methodology explained here on NSE website) :
Container Corporation Of India Limited (CONCOR) has considered and approved bonus at the ratio of 1 (one) Equity Shares for every 4 (four) Equity Shares held.
The Company has fixed Record Date as February 5, 2019 for the purpose allotment of Bonus equity shares.
Symbol : CONCOR
Bonus issue ratio : 1:4
Ex-Date : February 04, 2019
Effect on Holdings -
When a bonus is issued, the share price drops, in this case by a factor of 1.25 (Adjustment factor for Bonus issue of A:B is defined as (A+B)/B. In case of CONCOR, the adjustment factor will be (1+4)/4 = 1.25, since the bonus issue ratio is 1:4). So, if you held CONCOR at an average price of 660, the price of each share after bonus adjustment will be 528.
You’ll be given 1 share at Rs.0 for every 4 shares held at Rs 660, thereby maintaining your overall investment value. Please note that a bonus issue only increases liquidity and not your investment value.
Adjustments for Option Contracts -
- Strike Price -The adjusted strike price will be arrived at by dividing the old strike price by the adjustment factor
- Market Lot - The adjusted market lot will be arrived at by multiplying the old market lot by the adjustment factor. The revised market lot will be 1563.
Ex: CONCOR 31 JAN 660 CE lot size of 1250 - after adjustment will be CONCOR 31 JAN 528 CE lot size 1563
Adjustments for Future contracts -
- Futures base price: The adjusted futures base price shall be arrived at by dividing the old futures
price by the adjustment factor. - Market Lot: The adjusted market lot shall be arrived at by multiplying the old market lot by the
adjustment factor. The revised market lot would be 1563.
Ex: CONCOR 31 JAN FUT at 662.35 & lot size 1250 will become CONCOR 31 JAN 529.90 & lot size 1563.
Note: The above changes shall be effective from February 04, 2019. Refer this circular from NSE regarding this for more information. To know more about the impact of corporate actions on stock prices, check this chapter on Varsity.