NSE drops Kingfisher Airlines from F&O list

The National Stock Exchange (NSE) has removed Kingfisher Airlines from the futures and options (F&O) list. Accordingly, contracts will not be issued for the months beginning February 2012. “Existing unexpired contracts for expiry months of December and January would continue to be available for trading till their respective expiry and new strikes would also be introduced in the existing contract months,” the exchange said in a circular on Friday.

The exchange has a review process based on several parameters, including the company’s market capitalisation. If a company fell short on such parameters, it was dropped from the list, said brokers. Arun Kejriwal, director, KRIS, an investment advisory said, “The exchange had a criterion that a company should have at least 0.5 per cent of the total market capitalisation of the exchange to trade in the derivatives segment. If it falls below that level, it will be dropped.”

At Friday’s stock close of Rs 24, the market capitalisation of Kingfisher Airlines stood at Rs 1,197 crore. The stock has lost 70 per cent of its value in the last one year.

At present, F&O contracts are available for November, December and January 2012.

In the near month (November) Kingfisher futures, which will expire on Thursday, there was a heavy build-up of open interest at 9.18 million contracts.

Market participants said most positions were short. There is already a clamp on fresh positions on the Kingfisher counter, as it has crossed the permissible position limits.

The open interest was close to 3 million in the December stock futures. They saw an addition of 9,12,000 to open interest on Friday. On the far month contract, open interest was thin at 48,000.

Experts said the move may not have any immediate impact on the stock prices. “Since the December and January contracts will be available, participants will not have any problem in rolling over positions,” said Siddharth Bhamre of Angel Broking.

According to him, participants are expected to unwind their positions in January, as further rolling over will not be possible. Four other stocks — Gitanjali Gems, Great Offshore, KS Oils and Jindal South West Holdings — have also been dropped from the F&O list with effect from November 25.