Zomato To Jio Finance, Stocks That Can Enter F&O Space Soon

The new criteria announced by the Securities and Exchange Board of India could imply the addition of as many as 65 stocks in futures and options segment, with the exclusion of just 25.

The list of stocks are only possible additions and exclusions, as the final decision remains with the markets regulator, according to Nuvama Alternative and Quantitative Research.

On Thursday, SEBI announced revised criteria for inclusion of equities as futures and options contracts, with revision in four areas:

• Average daily market capitalisation and average daily traded volume over the past six months should be among the top 500.

• Median quarter sigma order size should be more than Rs 75 lakh over the past six months. A stock's quarter-sigma order size is the minimum order value, which can change the stock price by a quarter of its standard deviation.

• Market-wide position limit should be more than Rs 1,500 crore. This is the maximum number of derivative contracts, which can be open for a particular stock. It is calculated by considering the lower value of the following two metrics: 30 times the average number of shares traded daily during the previous calendar month, or 20% of the free float shares (those which are not held by promoters).

• Average daily delivery value in the cash market should be more than Rs 35 crore. Delivery refers to a type of transaction, where shares are bought with the intent to transfer them to one's demat account, instead of an intraday trade, where the transaction is sold-off at the end or before the end of the trading period on the same day.

Among the top names that may be included in the futures and options space are Zomato Ltd., Jio Financial Services Ltd., Avenue Supermarts Ltd., Adani Green Energy Ltd. and BSE Ltd.

In the banking and financials space, Union Bank of India, Life Insurance Corp., Yes Bank Ltd. and Bank of India may be included.

Certain public sector unit stocks also fit the criteria, according to the report. These include Indian Railway Finance Corp., SJVN Ltd., and Rail Vikas Nigam Ltd., among others.

The following stocks may be included to the derivatives segment:

Based on the revised criteria, the 25 possible exclusions include United Breweries Ltd., L&T Technology Services Ltd., and Balrampur Chini Mills Ltd., among others.