Shares of Intellect Design Arena have been excluded from the futures and options (F&O) segment, leading bourse National Stock Exchange (NSE) has announced.
Contracts for new expiry months will not be issued on expiry of existing contracts, it said in a circular on May 19.
“…the existing unexpired contracts of expiry months May 2023, June 2023, and July 2023 would continue to be available for trading till their respective expiry and new strikes would also be introduced in the existing contract months,” it said.
Accordingly, no contracts shall be available for trading in security with effect from July 28, 2023, NSE added.
In a note, Nuvama Institutional Equities said a stock gets excluded from the derivatives segment if it fails to meet certain parameters (like average median quarter sigma, average daily deliverable value etc) for three consecutive months.
“The exclusion is driven by a quantitative approach and its purely methodology driven, unlike the inclusions where the final call is taken by SEBI,” Nuvama added.
Regarding the impact on share prices, it said in eight out of the previous 10 such cases, the company’s stock has corrected one week prior to the announcement, with an average decline of 1.9 percent.
In seven out of ten times, a stock has corrected two weeks prior to the announcement, with an average decline of 2.5 percent.
“While post announcement, there is no clear price performance trend,” it noted.
Shares of Intellect Design Arena have dropped 1.70 percent over the past week.
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