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Reliance Industries, a leading Indian conglomerate, has announced a bonus share issue with a ratio of 1:1. This means that for every share held by an investor, they will receive one additional share. The bonus split will come into effect on October 28, 2023, which has been designated as the record date. The company's decision to issue bonus shares is expected to enhance shareholder value and boost liquidity in the market.
The bonus split will necessitate adjustments in the futures and options (F&O) contracts traded on Reliance Industries. The adjustments will be based on the mark-to-market settlement price of the relevant futures contract on October 25. For instance, the nearest expiry futures contract (October contract) closed at ₹2,657.7 on October 25. This price will be divided by 2, resulting in a revised price of ₹1,328.85 for the futures contract on October 28. Furthermore, the lot size for futures contracts will be doubled from 250 shares to 500 shares per contract.
The bonus split will also have an impact on option contracts. All strike prices in the option chain of Reliance Industries will be divided by 2 starting from October 28. For example, the strike prices of 2,740 and 2,760 will be adjusted to 1,370 and 1,380 respectively. These adjustments are aimed at ensuring a smooth transition and minimizing disruptions in the trading of Reliance Industries' F&O contracts.