National Stock Exchange (NSE) had announced expulsion of 34 stocks from the derivatives or futures and options (F&O) segment in April. Some of the notable counters that have been expelled include Jet Airways, Reliance Power, BEML, CEAT, Syndicate Bank, IDFC, Allahabad Bank and Ajanta Pharma.
The move follows tightening of section criteria for stocks in the derivatives segment by market regulator Securities and Exchange Board of India (Sebi) in 2018.
The stock exchange said the existing unexpired contracts for the securities for the month of April, May and June will be available for trading. However, no contracts will be available for trading in these scrips from June 28.
From an investor's perspective, once the stock enters the derivative segment, it is seen as positive move. Mostly, such stocks exhibit a positive trend as more trades enter the system and only a margin payment is made.
Here's a full list of the companies that have been banned from the F&O market, effective June 28
|Ajanta Pharmaceuticals Ltd.|
|Can Fin Homes Ltd.|
|CG Power and Industrial Solutions Ltd.|
|Chennai Petroleum Corporation Ltd.|
|DCB Bank Ltd.|
|Godfrey Phillips India Ltd.|
|Godrej Industries Ltd.|
|Gujarat State Fertilizers & Chemicals Ltd.|
|India Cements Ltd.|
|Infibeam Avenues Ltd.|
|IRB Infrastructure Developers Ltd.|
|Jet Airways (India) Ltd.|
|Jain Irrigation Systems Ltd.|
|Kaveri Seed Company Ltd.|
|Karnataka Bank Ltd.|
|Mangalore Refinery & Petrochemicals Ltd.|
|Oriental Bank of Commerce|
|PC Jeweller Ltd.|
|Repco Home Finance Ltd.|
|Reliance Power Ltd.|
|South Indian Bank Ltd.|
|Suzlon Energy Ltd.|
|Tata Communications Ltd.|
|TV18 Broadcast Ltd.|
|V-Guard Industries Ltd.|
On the flip side, when a stock moves out of derivative segment, it is sentimentally negative. Around the F&O expiry, there can be a recovery in such stocks as derivative positions start to square off. Out of the 34 stocks that will exit this segment on June 28, 11 stocks have gained ground since Tuesday as we got closer the expiry of June F&O contracts due Thursday.
|Stocks||Current Price||1-day change (%)|
|DCB Bank Ltd.||240||4.51|
|India Cements Ltd.||108||13.21|
|Oriental Bank of Commerce||96.1||4.68|
|Suzlon Energy Ltd.||5.85||18.18|
|V-Guard Industries Ltd.||249||4.97|
|Data source: Spider Software|