BAJAJFINSV have 2 events on 13 Sept:
1.) Share Split - Face Value Change from 5 To 1
2.) Bonus - 1:1 Bonus Issue of Equity Shares
So will this result in Bajaj Finserv price to go from 17382.5 to 1737.25 on 13th?
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Yes. You are right in your calculation. At the same time if you hold 1 share, it will now be 10 shares (post split and bonus) The overall value/market value will continue to remain the same.
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What will happen to the Strike Prices viz 17,000… 18,000 etc. Any idea!! and what happens to traders who hold position in those?
The option strike prices, as well as futures price, will be adjusted according to the adjustment formula provided by the exchange. You can check this exchange circular for more information.
The adjustments are carried out in such a way that the value of the position of the market participants, on the cum and ex-dates for the corporate action, continue to remain the same as far as possible. You can check out one such example here: Adjustments in F&O contracts of REC Ltd. on account of bonus issue
Excellent info, thanks!!!
This will increase MC of the company & Liquidity
BSE circular no 27 dated 7 September …from 13 September F&O market lot will be 500 shares and strike price of 17250 will be 1725 and so on…
Seems to me like a good time for me to add this in my portfolio for very long term as it has become affordable to me… Hope I’m not wrong.
Very informative