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HDFC Life, DMart among cos that could soon trade in F&O

Analysts said many of these stocks would have been included in the derivatives segment but for this ban period.

, ET Bureau|
Nov 04, 2019, 07.52 AM IST
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Amit Gupta, head of derivatives at ICICIdirect expects HDFC Life and SBI Life to be included in the F&O segment.
Mumbai: Insurance companies, retail supermarket Avenue Supermarts and India’s largest asset management company by assets HDFC AMC are among the stocks likely to be included in the futures and options (F&O) segment soon, said derivative analysts.

Capital markets regulator Securities and Exchange Board of India (SEBI) had barred the National Stock Exchange from accessing the securities market for a period of six months in May due to the colocation case, as a result of which it could not introduce any new derivative product in stocks or commodities. Now that the ban period is over, the exchange may announce the changes based on eligibility criteria being fulfilled.

Analysts said many of these stocks would have been included in the derivatives segment but for this ban period. Introduction of a security for trading on the F&O segment can take place only after approval from SEBI .

As per September quarter data, brokerage Edelweiss Securities has identified 14 eligible stocks including HDFC Life Insurance Company, SBI Life Insurance Company, ICICI Lombard General Insurance, Avenue Supermarts, Bandhan Bank, Edelweiss Financial Services, Godrej Properties, HDFC AMC, Indiabulls Ventures, Jubilant Life, Info Edge (India), Oberoi Realty, PNB Housing Finance and Nippon Life.
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Chandan Taparia, derivative analyst at Motilal Oswal sees HDFC Life making it to the F&O space.

“Many stocks are eligible but HDFC Life, D-Mart and Info Edge have a higher chance of inclusion,” said Taparia.

New securities being introduced in the F&O segment are based on the eligibility criteria which take into consideration average daily market capitalisation, average daily traded value, the market wide position limit in the security, the quarter sigma values, average daily deliverable value and as approved by SEBI.

For inclusion in F&O segment, a company should be among the top 500 stocks by average market capitalisation, the median quarter sigma should be more than Rs 25 lakh, it should have a market wide position limit of more than Rs 500 crore and average daily delivery value in the cash market should be more than Rs 10 crore.

Amit Gupta, head of derivatives at ICICIdirect expects HDFC Life and SBI Life to be included in the F&O segment. “These stocks have been performing. They are qualifying for inclusion in F&O and Nifty index,” said Gupta. SBI Life is also likely to be added to the MSCI India index, according to a recent note by Morgan Stanley.

Shares of HDFC Life have gained nearly 58 per cent so far this year, while that of SBI Life have gained 67 per cent.


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