Polycab shares tumble 5% as stock set to exit F&O segment from December 30 onwards. Here's why
Polycab India shares dropped over 5% after the NSE announced its exclusion from the F&O segment from December 30. The move follows insolvency proceedings initiated against the company, although NCLAT has stayed the NCLT order. Existing derivative contracts will continue until their respective December expiries.
Polycab India's shares experienced a significant drop of over 5% on Tuesday following the National Stock Exchange's (NSE) announcement that the company's stock would be excluded from the equity derivatives segment starting December 30. The F&O exit came as the NSE declared no new contracts for Polycab India after the expiration of existing contract months.
Existing contracts with expiries in October, November, and December will continue trading as usual, with new strikes being introduced before the discontinuation. The NSE also imposed a 100% margin requirement on all existing derivative contracts, effective T+2 days, and from October 14 onwards for new positions. The decision to remove Polycab from the F&O segment stems from the company's failure to meet Sebi's criteria, which include liquidity metrics and market-wide position limits.
However, Polycab has argued that a stay order by the National Company Law Tribunal (NCLT) has kept its insolvency proceedings in abeyance, preventing the company from being admitted to the IBC framework and thus ineligible for F&O trading. Polycab's shares have seen a decline of around 2% in the past month, but the stock has performed relatively well over the past year, with a 6% increase and a 220% gain over five years.
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