The Board of Directors of Bajaj Auto Limited (BAJAJ-AUTO) declared a dividend of Rs. 210 per share, with the ex-dividend date set for June 20, 2025.
SEBI has prescribed a framework for the exchanges to adjust corporate actions in derivative contracts at the time of the corporate action. The exchange has published everything regarding the adjustments in case of corporate actions here. Accordingly, if a company declares a dividend at and above 2% of the market value of the underlying security, it is considered an extraordinary dividend, and the exchange will take action in the adjustment of the futures and options contracts in the underlying security.
Since the dividend declared by BAJAJ-AUTO is above 2% of the market value of the security, the exchange has published this circular on the adjustment of F&O contracts in BAJAJ-AUTO on the ex-date: June 20, 2025.
Adjustment for future contracts:
All positions in futures contracts of BAJAJ-AUTO will be marked-to-market on the last cum-dividend date, i.e., June 19, 2025, based on the daily settlement price of the respective futures contract. Subsequently, open positions will be carried forward at the daily settlement price less Rs. 210 (dividend amount) for the respective futures contract.
From June 20, 2025 (ex-dividend date), daily mark-to-market settlement of the futures contracts will continue as per normal procedures.
For example:
Assume you bought 1 lot (75 quantities) of BAJAJ-AUTO futures on June 19, 2025, at Rs. 8,540, and the daily settlement price at the market close is Rs. 8,580, you would have made a mark-to-market profit of Rs. 40 per share.
On June 20, 2025, the previous day’s position will be carried forward at Rs. 8,370 (i.e., 8,580 – 210). If the closing price on June 20, 2025, is Rs. 8,400, you’ll make a mark-to-market profit of Rs. 30 per share.
Adjustment for options contracts:
The full value of the dividend, i.e., Rs. 210, will be deducted from all the cum-dividend strike prices on the ex-dividend date. All positions in existing strike prices will continue to exist in the corresponding new adjusted strike prices.
For example:
The strike price of the Rs. 8,500 Call Option will be reduced to Rs. 8,290 on June 20, 2025, and the positions in the Rs. 8,500 Call Option will continue to exist in the Rs. 8,290 Call Option.
The lot size of the F&O contracts will not change.
Also, if you hold equity shares of BAJAJ-AUTO in your Demat account as of June 20, 2025 (ex-date), you will be entitled to receive the dividend, which will be credited directly to your primary bank account within 30 to 45 days from the record date.