Tata Motors Demerger: Early Expiry and Physical Settlement for All F&O Contracts

A significant adjustment is taking place for Tata Motors Limited F&O contracts, driven by its upcoming demerger. This adjustment will affect all existing derivatives contracts and their settlement process, as mandated by recent circulars from NSE Clearing and SEBI guidelines.

As per NSE recent Circular

In pursuance of Byelaws of NCL pertaining to Clearing and Settlement of deals, SEBI circular reference

SMDRP/DC/CIR-8/01 dated June 21, 2001, Consolidated Circular no. 043/2025 (Download no.

NCL/CMPT/67750) dated April 29, 2025, Circular no.175/2025 (Download no. NSE/FAOP/70615) dated

October 03, 2025, Circular no.67/2018 (Download no. NCCL/CMPT/38039) and Circular no. 008/2023

(Download no. NCL/CMPT/55330) dated January 20, 2023, the following actions will be carried out by NCL:

1.       All existing monthly contracts in the underlying TATAMOTORS with expiry dates post OCT 13, 2025, shall expire on OCT 13, 2025.

2.       The settlement price to be reckoned for the purpose of final settlement shall be settlement price of security TATAMOTORS in the Capital Market segment, on Oct 13, 2025.

3.       The pay in/ pay out of final MTM settlement of all Futures contracts on TATAMOTORS shall be on Oct 14, 2025 (T+1 day).

4.       All positions in the existing futures and options contracts on the underlying TATAMOTORS shall cease to exist pursuant to the final settlement on Oct 13, 2025, and will result in physical settlement.

5.       Such physical obligations of F&O segment shall be netted with obligation in Capital market for trade date Oct 13, 2025, and shall be settled in Capital market segment on Oct 14, 2025, as per the

6.       mechanism specified by our Circular no.67/2018 (Download no. NCCL/CMPT/38039) dated June 15, 2018 & Circular no. 008/2023 (Download no. NCL/CMPT/55330) dated January 20, 2023.

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What Traders Should Do

• Square off any F&O positions in Tata Motors before October 13, 2025 to avoid mandatory physical settlement, especially if unwilling or unable to take/give delivery.
• MTF users must convert positions to delivery by the cutoff date to ensure continuity post-corporate action.
• Watch for increased margin requirements and collateral haircuts from October 9, 2025.
• Stay alert for a fresh list of option strikes and details on NSE, BSE, and broker communications one day prior to the ex-date