Adjustments in F&O contracts of Vedanta Ltd. on account of extraordinary dividend

The Board of Directors of Vedanta Limited at its meeting held on July 19, 2022, declared an interim dividend of Rs. 19.5 per share, the ex-dividend date being, July 26, 2022.

SEBI has prescribed a framework to the exchanges for adjustment of 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 as extra-ordinary dividend and the exchange will take actions in the adjustment of the futures and options contracts in the underlying security.

Since the dividend declared by Vedanta is above 2% of the market value of the security, the exchange has published this circular on the adjustment of F&O contracts in Vedanta on the ex-date: July 26, 2022.

Adjustment for future contracts:

All positions in futures contracts of Vedanta will be marked-to-market on the last cum-dividend date i.e. July 25, 2022, 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. 19.5 (dividend amount) for the respective futures contract.

From July 26, 2022 (ex-dividend date), daily mark-to-market settlement of the futures contracts would continue as per normal procedures.

For example:

Assume you bought 1 lot (1550 quantity) of Vedanta futures on July 25, 2022, at Rs. 260 and the daily settlement price at the market close is Rs. 270, you would have made a mark-to-market profit of Rs. 10 per share.

On July 26, 2022, the previous day’s position will be carried forward at Rs. 250.5 (i.e. 270 - 19.5). If the closing price on July 26th is Rs. 255, you’ll make a mark-to-market profit of Rs. 4.5 per share.

Adjustment for options contracts:

The full value of the dividend i.e. Rs. 19.5 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 Rs. 250 Call Option will be reduced to Rs. 230.5 on July 26, 2022, and the positions in Rs. 250 Call Option will continue to exist in Rs. 230.5 Call Option.

The lot size of the F&O contracts will not change.

Also, if you hold equity shares of Vedanta Limited in your demat account as of July 27, 2022 (record date) you will be entitled to receive the dividend and will be credited directly to your primary bank account within 30 to 45 days from the record date.


Hi Sir, I have a question related to the VEDL Futures.
I had sold a FUT 25-AUG-2022 at 292.00, . The market close of VEDL on the 26th was 259. At what price my position will be carried forward to the 27th?
I had a profit of 33*1550 on the 26th, what happens to the profit on the 27th?


The adjustments happened today. Explained the futures adjustment process here: