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The National Stock Exchange has revised the market lot of Vodafone India to 1.4 lakh shares from the current 98,000 shares and Bank Nifty from the current 20 to 25 in the derivative segment. While 74 individual stocks saw an upward revision, for four stocks — Asian Paints, Berger Paints, Indraprastha Gas and Muthoot Finance — the market lot has been halved.
It may be recalled that Bank Nifty’s lot size was revised to 20 from 40 in October 2018, as the index moved up sharply, thanks to underlying stocks, especially HDFC and HDFC Bank.
“Only the far month contract, i.e. July 2020 expiry contracts, will be revised for market lots. Contracts with maturity of May 2020 and June 2020 would continue to have the existing market lots. All subsequent contracts (i.e. July 2020 expiry and beyond) will have revised market lots,” the NSE said in a statement.
So, for retail investors wishing to take position in Vodafone Idea and other counters where the lot size has been high, the margin commitments would be very huge, warn F&O experts.
Increase in market lot
Among the counters that saw an increase in market lot are Adani Power (revised market lot:15,000 shares), Aurobindo Pharma (1,300), Bank of Baroda (8,200), BHEL (21,000), Canara Bank (5,000), HDFC Bank (550), HDFC Life Insurance (1,100), ITC (3,200), L&T Finance Holdings (6,800), Larsen & Toubro (550), LIC Housing Finance (2,000), Lupin (850), Mahindra & Mahindra (1,400), NTPC (5,700), ONGC (7,700), PNB (14,000), Sun Pharmaceuticals (1,400), TCS (300), Tata Motors (5,700), Tata Power Co (13,500) and Vedanta (6,200).
According to a Chennai-based market analyst, the revision is quite natural, as the market and some of the heavyweight counters have crashed in recent weeks.
The market lots of 64 stocks remain the same, NSE circular added.
To protect investors from dabbling in high risk F&O market, market regulator SEBI, in 2015, had introduced tough eligibility criteria for stocks to enter the derivative segment. From the initial ₹2 lakh, it hiked the minimum investment size for any equity derivative product to ₹5 lakh.
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