CanFinHome goes ex-split in the ratio 5:1 on 12 Oct 2017, that is 5 split shares given for every share held in Demat. How does this affect my equity holdings and F&O positions?
Hello,
Can Fin Homes Ltd goes ex-split in the ratio 5:1 on 12 Oct 2017, i.e, each share held in Demat which is of face value Rs.10 is split into 5 shares of face value Rs.2 each.
Effect on Holdings:
When a stock is split, the share price reduces, in this case by a factor of 5. If you hold Can Fin Home shares at an average price of Rs.2500, the price of each share after the 5:1 split will be 2500/5 = Rs.500. Your share price gets divided by 5.
Please note that when a stock splits, it’s face value reduces. Here, the face value reduces from Rs.10 to Rs.2 and the number of shares increases by 5 times. But since the price of each stock reduces by 5 times, your investment value remains the same.
P&L of holdings:
Your Can Fin Home holdings will show an artificial fall in P&L of about 80% on the ex-date of 12 Oct as well as on the record date of 13 Oct. The split shares will be credited to your Demat at the end of the Record date of 13 Oct and it will be visible in your Kite holdings from 16 Oct which is a Monday.(Since 14 Oct and 15 Oct are market holidays). A new ISIN will be activated for the split shares from the ex-date onwards.
You will receive an SMS from CDSL at the end of the Record date when your split shares are credited to your Demat.
Effect on F&O positions:
Option strike prices are divided by the factor of 5. The old strike price of 2600 becomes 520, strike price of 2650 becomes 530 and so on. The F&O lot size is multiplied by the factor of 5 where the old lot size of 250 will be revised to a new lot size of 1250.
The future and option prices are divided by the factor of 5 to maintain the same contract value as of before the split.
If you’re unable to see the revised market lot size on Kite, please do a hard refresh Ctrl+Shift+R to clear your Kite cache memory and you will be able to see the revised lot size and new strike prices.
This is the NSE Circular for F&O Adjustments in Can Fin Homes.
To know more about corporate actions and its impact on stock prices, do read this Varsity article.
1 Like