Polycab shares tumble 5% as stock set to exit F&O segment from December 30 onwards. Here’s why
Polycab shares dropped to Rs 7,955 apiece on Tuesday morning. The National Stock Exchange (NSE) said no contracts for new expiry months in Polycab India will be issued after the expiry of existing contract months. The existing contracts with expiry in October, November and December will continue trading as usual.
NSE will also introduce new strikes in these existing contract months before the discontinuation. The latest decision by the stock exchange comes after it announced that futures and options contracts for new expiry months shall not be issued on expiration of October 2026 contracts.
Also read | Polycab India’s F&O exit: NSE sets December 30 deadline; NCLAT stays insolvency order
Further, a margin of 100% shall be levied on all existing derivative contracts with effect on a T+2-day basis, that is on all open positions as on October 13, and new positions created from October 14, onwards, according to NSE’s circular. After the expiry of existing contracts, further surveillance actions of price band/gross settlement and more as under the IBC framework shall be applicable with effect from January 1, 2027.
Why is a stock removed from F&O segment?
A stock is excluded from the F&O segment when it fails to meet criteria set by the market regulator Sebi. These norms range from liquidity metrics, market-wide position limits, corporate restructuring and more.
If a stock is admitted to insolvency and bankruptcy (IBC) framework, it is moved to restrictive trading categories, thereby making it ineligible to trade in the F&O segment.However, it is important to note that Polycab has informed the exchanges that the NCLAT had stayed and kept in abeyance the October 7 order passed by the National Company Law Tribunal (NCLT), admitting the corporate insolvency resolution process (CIRP) against the company in a case filed by Asier Metals Private Limited. The proceedings relate to an alleged operational debt of Rs 2.79 crore under Section 9 of the Insolvency and Bankruptcy Code, 2016.
Polycab share price
Polycab India shares have fallen around 2% in a month, with the stock seeing some sharp downturns recently following UltraTech Cement’s foray into the cables and wires segment. The stock is overall up around 6% in one year.
In the longer term, the shares of the company have delivered positive returns of more than 52% in three years and nearly 220% in five years. The company has a market capitalisation of around Rs 1.23 lakh crore.
Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.
