The National Stock Exchange of India (NSE) will expand its offering by introducing futures and options contracts on 45 additional securities, starting from November 29, 2024. This decision follows the stock selection guidelines set by the Securities and Exchange Board of India (SEBI).
List of Newly Added Securities
The selected securities span multiple sectors, providing investors with a wide range of investment opportunities. Below are examples of some key companies across different sectors:
Here is the list of companies from the NSE Futures and Options (F&O) segment, categorized by their respective sectors:
1. Energy
- Adani Energy Solutions Limited
- Adani Green Energy Limited
- Adani Total Gas Limited
- CESC Limited
- CG Power and Industrial Solutions Limited
- JSW Energy Limited
- Oil India Limited
- SJVN Limited
2. Financial Services
- Angel One Limited
- Bank of India
- BSE Limited
- CAMS (Computer Age Management Services)
- Central Depository Services (India) Limited
- Housing & Urban Development Corporation Limited (HUDCO)
- Indian Bank
- Indian Railway Finance Corporation Limited (IRFC)
- Jio Financial Services Limited
- Life Insurance Corporation of India (LICI)
- One 97 Communications Limited (Paytm)
- PB Fintech Limited (PolicyBazaar)
- Poonawalla Fincorp Limited
- Union Bank of India
- Yes Bank Limited
3. Industrials
- APL Apollo Tubes Limited
- Cyient Limited
- HFCL Limited
- IRB Infrastructure Developers Limited
- Jindal Stainless Limited
- KEI Industries Limited
- NCC Limited
- NHPC Limited
- Sona BLW Precision Forgings Limited
- Supreme Industries Limited
- Tube Investments of India Limited
4. Technology
- Delhivery Limited
- KPIT Technologies Limited
- FSN E-Commerce Ventures Limited (Nykaa)
- Tata Elxsi Limited
5. Consumer Discretionary
- Avenue Supermarts Limited (DMart)
- Kalyan Jewellers India Limited
- Macrotech Developers Limited (Lodha)
- Prestige Estates Projects Limited
6. Consumer Staples
- Varun Beverages Limited
7. Healthcare
- Max Healthcare Institute Limited
8. Communication Services
- Zomato Limited
Additional Information
Detailed information regarding the market lot, strike price scheme, and quantity freeze limit for these securities will be provided to NSE members on November 28, 2024, through a separate circular.
Benefits of Being in F&O Segment for Companies
Increased Liquidity:
- Being part of the Futures and Options (F&O) segment helps companies attract more investors due to enhanced liquidity. This can lead to more trading volumes and better price discovery.
Broader Investor Base:
- Companies in the F&O segment tend to attract a wider range of investors, including those looking for leveraged trading opportunities, arbitrage opportunities, or hedging their risk exposure. This can increase stock visibility and broaden the investor base.
Improved Stock Market Visibility:
- Inclusion in the F&O segment provides greater visibility in the market, as F&O contracts on a company’s stock are tracked by a variety of investors, analysts, and media.
Market Stability:
- The presence of F&O contracts allows for better risk management. Market participants use F&O contracts to hedge against potential volatility, which can reduce overall market fluctuations and bring stability to the stock price.
Enhanced Market Perception:
- Companies included in the F&O segment are often viewed as more stable and established in the market. Being part of this segment can increase investor confidence and improve the company’s brand reputation.
Boost to Corporate Governance and Financial Performance:
- The enhanced scrutiny from being listed in the F&O segment encourages companies to maintain high standards of corporate governance and transparent financial reporting, which in turn helps attract institutional investors.
Ability to Raise Capital More Easily:
- A company’s inclusion in the F&O segment can increase its stock’s attractiveness to institutional investors, which can improve its ability to raise capital or take part in mergers and acquisitions.
Disadvantages of Not Being in F&O Segment for Companies
Limited Liquidity:
- Companies not listed in the F&O segment may have lower trading volumes and liquidity, which could make their stock harder to trade. This can deter potential investors and make it more difficult for existing shareholders to buy or sell large quantities of shares.
Reduced Market Exposure:
- Companies outside the F&O segment may have reduced market visibility, making it harder for them to attract attention from institutional investors or traders who are looking for stocks with F&O contracts for leverage and hedging opportunities.
Missed Trading Opportunities for Investors:
- Investors and traders who rely on F&O contracts for leveraged positions or hedging strategies may find fewer opportunities in companies outside the F&O segment. This could lead to a reduced investor base, particularly among active traders.
Higher Volatility:
- Stocks outside the F&O segment may experience more volatility because they lack the stabilizing influence of futures and options contracts. Without the ability to hedge, investors may be more likely to react emotionally to market news, increasing price fluctuations.
Lower Institutional Interest:
- Many institutional investors, including hedge funds, use F&O contracts for portfolio diversification and risk management. If a company is not included in the F&O segment, it may miss out on institutional investment, which can limit its growth potential and stock price appreciation.
Perception of Lower Credibility:
- Not being part of the F&O segment can sometimes be seen as an indication that the company is smaller, less stable, or less mature. This can potentially hurt the company’s public perception and investor confidence, especially in comparison to its peers that are part of the F&O segment.
Limited Hedging Opportunities:
- Companies that are not in the F&O segment cannot directly benefit from the ability to hedge risk using futures or options. This may expose the company to greater risks in volatile market conditions or during significant economic shifts.
Being part of the F&O segment offers significant advantages in terms of liquidity, market visibility, and investor interest. It allows companies to attract more institutional and retail investors and improves their ability to manage market risks. However, companies outside the F&O segment may face lower liquidity, limited investor engagement, and a perception of lower credibility in the market. Therefore, being included in the F&O segment can be seen as a strategic move for companies aiming to improve their market standing and overall financial performance.
