Tata Motors (₹678.95) has undergone demerger by separating the commercial vehicles arm of the company, which will be called TML Commercial Vehicles. October 14 is the record date to determine eligible shareholders, who will get one share of TML Commercial Vehicles with a face value of ₹2 each for every one share in Tata Motors of the same face value.
Consequently, there will be adjustments in the futures and options (F&O) contracts of the stock. That said, before the introduction of adjusted contracts, the existing ones will cease to exist.
That is, all contracts with expiry dates post October 13 will expire on October 13. So, all futures and options contracts on Tata Motors with expiry dates October 28, November 25 and December 30 will expire on Monday, October 13.
These contracts will be settled based on the final settlement price of Tata Motors on October 13. Note that these contracts, unless closed before the expiry, will be physically settled. And for settlement, the positions held in F&O will be netted with the positions in the cash market if there are any.
Derivatives contracts on Tata Motors will again be introduced from the effective date, which is October 14. Details like scheme of option strikes for new contracts will be provided on October 13.
From the perspective of trading, Tata Motors, being a constituent of indices like Nifty 50, Nifty Auto etc., would usually be considered for cross margin calculation. But because of the prospective changes, the stock will be excluded for this purpose at the end of the day on October 13.
However, this will not affect cross margin calculation with other stocks as the weightage of other constituents of indices will remain the same. But based on the closing price of Tata Motors on October 14, weights of the index will be revised and published.
We suggest traders liquidate the positions held in F&O contracts on Tata Motors on Monday. Once the new contracts are introduced, we recommend waiting to see how the liquidity is built up and look at details like available strike prices and so on before entering fresh trades.
Published on October 11, 2025
