New SEBI Rules May Shake Up F&O Segment with 80 Potential Additions, Including Jio Financial and Zomato

The Securities and Exchange Board of India (SEBI) has recently introduced revised guidelines that could significantly impact the futures and options (F&O) segment in the Indian stock market. According to analysts, the new rules could lead to the inclusion of 64 to 80 new stocks in the F&O segment while possibly excluding 18 to 23 existing ones.

Among the top contenders for inclusion are Jio Financial Services and Zomato, two prominent companies that could soon find themselves as part of the Nifty 50 index. The revised rules could accelerate their entry into this prestigious list as early as the March 2025 review.

SEBI's new criteria for inclusion in the F&O segment were detailed in a circular issued on Friday. The regulator has made substantial changes, including tripling the median quarter sigma order size (MQSOS) for F&O stocks. This change aims to ensure that only stocks with significant liquidity and trading volumes remain in the segment.

"If a stock in F&O fails to meet the new eligibility criteria for a continuous period of three months on a rolling basis, it will be removed from the F&O segment," stated Sriram Velayudhan, Head of IIFL Alternative. "No new contracts will be issued for stocks that are set to exit the F&O segment."

Nuvama, a leading brokerage firm, has estimated that up to 80 new stocks could be included in the F&O segment under the new rules. In addition to Jio Financial and Zomato, other companies likely to join the F&O segment include fintech giants like Policy Bazaar, Delhivery, Paytm, and Nykaa. Rail and shipbuilding companies such as IRFC, RVNL, Mazagon Dock Shipbuilders, and Cochin Shipyard are also strong contenders for inclusion.

According to Nuvama Alternative and Quantitative Research, companies like Abbott India, Metropolis Healthcare, Gujarat Gas, and Can Fin Homes are among those that could be added to the equity derivatives segment. The excitement is building as market participants eagerly await the potential inclusion of these stocks.

"The real excitement kicks in if the F&O inclusion for both these names happens within the next few months," said Abhilash Pagaria, Head of Nuvama Alternative. "This could pave the way for their entry into the Nifty 50 index by March 2025."

SEBI has also increased the market-wide position limit (MWPL) for F&O stocks to ₹1,500 crore and raised the average daily delivery value (ADDV) requirement to ₹35 crore. These changes reflect the significant growth in the market since the last review.

IIFL Alternative Research predicts that 64 stocks will be included, and 23 will be excluded under the new SEBI rules. Some of the large-cap stocks likely to be included are Jio Financial, LIC, BSE, Avenue Supermarts (DMart), Adani Green, CDSL, Macrotech Developers (Lodha), Angel One, and Yes Bank.

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However, the new rules are not without their exclusions. New-age companies like Zomato and PB Fintech (Policy Bazaar) could be among those facing exclusion. A new Product Success Framework (PSF) will be introduced to evaluate the potential exit of stocks from the F&O segment. SEBI has stated that exclusions based on the PSF criteria will not occur before March 2025, giving the market some time to adjust to these changes.

[Disclaimer: The information provided in this article is for educational purposes only and should not be construed as financial or investment advice. Always consult with a qualified financial advisor before making any investment decisions.]