Whirlpool of India is likely to be excluded from the futures and option (F&O) segment, as the stock is not seeing enough activity. As per Nuvama Institutional Equities’ calculations, the stock will be excluded from the June series.
A stock gets excluded if it fails to meet certain criteria, including delivery volume, market-wide position limit and average median quarter sigma, a statistical value based on order size in any stock, for three consecutive months.
The exclusion is driven by a quantitative approach and is purely methodology driven, unlike the inclusions where the final call is taken by market regulator the Securities and Exchange Board of India (SEBI).
“As per our calculation and understanding of methodology, we believe Whirlpool holds a high chance of getting excluded from the derivative segment in June series and onwards,” said Abhilash Pagaria, an analyst at Nuvama. “The current open interest in the stock is just Rs 100 crore.”
He said the stock may fail to meet the minimum delivery criteria for the third consecutive month till mid March. He expects an official announcement for exclusion in the later half of March.
Honeywell Automation, FirstSource Solutions and Torrent Power are some of the recent names excluded from the F&O segment. As of now, there are a little over 190 stocks in F&O segment.
According to the Nuvama analysts, a stock usually sees selling one and two weeks ahead of the announcement of exclusion. While post announcement, there is no clear price performance trend.
Even on March 3, the Whirlpool of India saw limited trading. The stock was flat in Mumbai trading.
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