Bajaj Finance bonus, split issue: How F&O contracts will get adjusted

Bajaj Finance will undergo a stock split and bonus issue, and as a result, the National Stock Exchange (NSE) will adjust its Futures and Options (F&O) contracts starting June 16, 2025, which is the ex-date for the corporate action.

The company is issuing four bonus shares for every one share held and simultaneously splitting each equity share with a face value of Rs 2 into two equity shares. This means for every one share held, investors will receive four bonus shares, and each share will be split into two, resulting in ten shares in total.

Together, this means that for every 1 existing share, a shareholder will end up with 10 shares (2 shares from the split × 5 shares after the bonus).

So, how will this work for the F&O contracts?

NSE, according to its recent circular, has taken an adjustment factor of 10. An adjustment factor is used to ensure that the value of a futures or options contract stays the same after a corporate action like a bonus or stock split.
In the case of Bajaj Finance, the stock split turns 1 share into 2 shares, implying an adjustment factor equal to 2. Further, the bonus issue gives 4 extra shares for every 1 share (total 5 shares), which implies an adjustment factor of 5.

Live Events

Therefore, the final combined adjustment factor is calculated as 2 × 5 = 10.

Adjustment in Futures contracts

The price of each futures contract will be divided by 10 to reflect the adjustment.
For example, if a futures contract is priced at Rs 9,600 before the ex-date, it will be revised to Rs 960 after adjustment.
For the lot size adjustment, the number of shares per futures lot will be multiplied by 10. Therefore, if the lot size was 125 shares earlier, it will become 1,250 shares after June 16.

Also read: How 50 Bajaj Finance shares will turn into 500 by June 27. Explained

With this, the contracts expiring in June 2025 will have a revised lot size of 1,250 shares. Contracts expiring in July 2025 and later will have a revised lot size of 750 shares, as previously notified by the NSE in March 2025.

Adjustment in Options Contracts

All option strike prices will be divided by 10.

For example, the Rs 9,600 strike price will now be adjusted to Rs 960. Additionally, just like in futures, the options lot size will be multiplied by 10, wherein a lot of 125 shares will become 1,250 shares after the adjustment.

These changes make sure that the overall value of the contract remains unchanged.

Investors holding existing futures and options contracts will neither gain nor lose value because of the bonus and split.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)