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Polycab India shares drop as NSE removes it from F&O
14 Oct
Summary
- Polycab India shares fell over 5% after NSE announced F&O exclusion.
- Exclusion from F&O segment is effective from December 30.
- Insolvency proceedings were initiated, but NCLAT has stayed the NCLT order.
Polycab India's shares saw a notable decline of more than 5% on Tuesday. This drop occurred subsequent to the National Stock Exchange (NSE) announcing the company's removal from the equity derivatives segment, an exclusion set to take effect from December 30. The NSE will cease issuing new futures and options contracts for Polycab India after existing contracts expire.
Existing derivative contracts with October, November, and December expiries will continue to trade as usual. The NSE also stated that a 100% margin would be applied to all existing derivative contracts from October 14 onwards. This action follows insolvency proceedings initiated against Polycab India. However, the National Company Law Appellate Tribunal (NCLAT) has issued a stay on the National Company Law Tribunal's (NCLT) order to admit the company into insolvency resolution.
Stocks are typically removed from the F&O segment for failing to meet regulatory criteria, such as liquidity or corporate restructuring issues. Admission into insolvency frameworks often leads to restrictive trading categories, making a stock ineligible for F&O trading. Polycab India's exclusion is temporary until their contract expiries, with a 100% margin on open positions as of October 13.
