As per SEBI guidelines for adjustments to F&O contracts in case of the announcement of corporate actions (Methodology explained here on NSE website) :
HDFC Bank has considered and approved stock split at the ratio of 2:1, i.e, each share with face value of Rs.2 will be split into 2 shares with face value of Re.1.
The Company has fixed Record Date as September 20, 2019, for the purpose of Share Split.
Symbol : HDFCBANK
Bonus issue ratio : 2:1
Ex-Date : September 19, 2019
Effect on Holdings -
When a stock split happens, the share price drops based on the adjustment factor. Adjustment factor for Stock split of A: B is defined as (A/B). In the case of HDFCBANK, the adjustment factor is (2/1) = 2, since the split ratio is 2:1.
So, if you held 1 stock of HDFCBANK at an average price of 2200, after split adjustment you will hold 2 shares with average price of 1100.
Adjustments for Option Contracts -
-
Strike Price: The adjusted strike price shall be arrived at by dividing the old strike 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 500.
Ex: HDFCBANK 26-SEP-2019 2200 CE lot size of 250 after adjustment will be HDFCBANK 26-SEP-2019 1100 CE lot size 500.
Adjustments for Future contracts -
- Futures price: The adjusted futures 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 500.
Ex: HDFCBANK 26-SEP-2019 2200 lot size 250 after adjustment will be HDFCBANK 26-SEP-2019 1100 lot size 500.
Note: The above changes are effective from 19th September, 2019. Refer to this circular from NSE for more info on this. To know more about the impact of corporate actions on stock prices, check this chapter on Varsity.