Announcements

Vikas Lifecare Ltd. has credited existing shareholders’ Demat accounts with REs (Rights Entitlements) after it announced a Rights Issue.

What does this mean?
A company announces a Rights Issue to invite existing shareholders to buy more shares, usually at a discounted price. These shares are known as Rights Shares.

After the Rights Issue is announced, the company then credits its existing shareholders’ Demat Accounts with REs (Rights Entitlements).

These REs are not the Right Shares but the benefit given to existing shareholders to apply for the Right Shares. If shareholders do not wish to apply for these Rights Shares, they can even trade these REs in the market until a particular date.

To learn more about rights, click here.

What does this mean for Vikas Lifecare Ltd. shareholders?
Existing shareholders of Vikas Lifecare Ltd. (as on record date 21st May 2021) have two options - 

1. They can use their REs to apply for more shares of Vikas Lifecare Ltd. (in proportion to their existing shares - 2 for every 5 shares held) at a price of Rs.1.85  per share.
2. If they do not wish to apply for more shares, they can even trade their REs in the market.

Please note: REs only give you the right to participate in the ongoing Rights Issue of a company. This means using these REs you can make an application for Rights Shares with necessary application money or renounce the REs before the issue closes.

REs which are neither subscribed by making an application with requisite application money nor renounced, on or before the Issue closing date shall lapse and shall be extinguished after the Issue closing date

What dates should one keep in mind?
First and Last date to apply for Rights Shares:  27th May 2021 - 10th June 2021
If you’re interested in applying for the right shares, you can apply on or between these dates.
Last date to trade your Rights Entitlement: 7th June 2021
If you do not wish to apply for the rights shares, you can trade your REs in the market on or before this date.

How To Apply for Rights Shares?
There are 3 ways to apply -
1) Online through ASBA (Applications Supported by Blocked Amount) if your bank supports it just like you do for an IPO.
2) Online through the RTA (Registrar and Transfer Agent) website 
3) Offline by filling the Composite Application Form (CAF) received in your courier from the company’s RTA and then submitting it at a Self Certified Syndicate Banks (SCSBs) branch.

All open position(s) in the F&O segment with a 27-05-2021 expiry date (except those who have opted for physical settlement) should be squared off  before 12:00 PM on 27th May 2021 to avoid any further action by Upstox.

What does this mean?
In an F&O contract, when there is an open position that has not been squared off by its expiry date, physical settlement takes place. This implies the physical delivery of stocks to settle the open transactions instead of settling them with cash.

Here’s an example – A trader bought futures for XYZ (lot size – 5000) at Rs. 100, so the contract value is Rs. 5,00,000. On expiry day, if the settlement price for XYZ is Rs. 102 and the contract has been settled on a cash basis, the trader will get a profit of Rs. 10,000. If the contract has not been settled, physical settlement takes place, which means the trader will have to pay an amount of Rs. 5,10,000 (as per settlement price of Rs.102, lot size 5000) and 5000 shares will be delivered to his Demat account as per the T+2 days settlement cycle.

As per our latest announcement mentioned here, we require consent in order to physically settle your transactions.

However, for all users who have not submitted consent and who do not square-off their positions before 12:00 PM on 27th May 2021, then here’s what will happen:

A) Auto-square off by Upstox:

If users cannot square off your positions before the cut-off time (i.e., 12 PM on 27th May 2021), we will square them off at the prevailing market rates. Such square-off orders will be placed by our team as “Market Orders” and since order matching happens at the Exchange level, we shall not be liable for the rate at which they are executed.

B) Physical settlement by the Exchange:

If we cannot square off your positions due to market operational reasons, positions will be physically settled by the Exchange, and you will have to bear the costs (penalties & losses) arising from it. This means -

1. For a long open position (Long Futures, Long Call Options, Short Put Options)
   Your long open position will get converted into a ‘Buy Equity Delivery,’ and you will be liable to pay the entire settlement amount as the holder of the position.
2. For a short open position (Short Futures, Short Call Options, Long Put Options)
   Your short position will get converted into a ‘Sell Equity Delivery,’ and you as a holder of the position will be liable to deliver the shares; else, an auction process will be applicable.

To avoid this entire process, we recommend squaring off all open F&O trades before 12 PM on 27th May 2021.

Feel free to refer to the exchange’ circular  here.

Tomorrow, 26th May 2021 is a settlement holiday on account of Buddha Purnima. Due to this, all Equity Delivery orders placed on 25th May and 26th May 2021 will reflect in your Demat account on Friday 28th May 2021.

To help you understand what this means, we’ve simplified the details below.

What’s a settlement holiday?
Settlement holidays are when markets are open but settlement of your trades do not take place as per the usual T+2 cycle because either the depositaries (NSDL and CDSL) or banks are closed on that day.

How does this holiday impact your trades?
Since the settlement date denotes the final transfer of ownership of shares and not the day you made the trade, a holiday in between causes a delay in the final transfer of shares.

What will be the impact of the Settlement Holiday on 26th May 2021?
On account of the settlement holiday on 26th May 2021 kindly note the following impact on your holdings:

1. All trades placed on 25th and 26th May in the Equity segment will be settled on Friday, 28th May 2021. 
2. All trades placed on 25th May in the Derivative segment will be settled on 27th May
3. All shares bought on 25th May will be visible under T1 holdings on the 26th May but you will only be able to sell them on 27th May.
4. The credit bill amount for all segments on 25th May will not be available for trading or withdrawal purposes on 26th May because this amount will be blocked for one day due to the settlement holiday.

You can also check a list of future settlement holidays here.

If you have any queries, you can raise a ticket on the Upstox Mobile or Desktop app.

Happy Trading,
Team Upstox.

We are conducting a scheduled upgrade & maintenance activity on 22nd May 2021, from 9:00 AM to 1:00 PM to continue to offer you a seamless investing and trading experience on Upstox. During this time, you may not be able to log into the Upstox mobile app & desktop platform. Thank you for your patience.

As per a SEBI mandate, physical settlement is compulsory if a trader holds a position in any Stock F&O contracts on expiry date.

What is physical settlement?
In a Stock F&O contract, when there is an open position that has not been squared off by its expiry date, physical settlement takes place. This implies they have to physically give/take delivery of Stocks to settle the open transactions instead of settling them with cash.

Examples of physical settlement:

Future

Long positions of 1 lot of Reliance, 250 quantity at Rs. 2000 i.e. Rs. 5 lakh contract value

F&O = 20% charges i.e. Rs. 1,00,000. This means, you are required to give Rs. 1 lakh, but if you decide to physically settle then you need to have a complete contract value of  Rs. 5 lakhs.

Short positions of 1 lot Reliance 250 quantity at Rs. 2000 i.e. Rs. 5 lakh contract value

F&O = 20% charges i.e. Rs. 1,00,000. This means, you are required to give Rs. 1 lakh, but if you decide to physically settle then you need to have the holdings of 250 quantity of Reliance and Rs. 1 lakh margin money till expiry date.

Option

Long - 1 lot of Reliance, 250 quantity for strike price of Rs. 2000 Call (CE) Options.

If the underlying price of Reliance is greater than the strike price of Rs. 2000, then the contract is said to be ITM (In-The-Money). If you wish to go for physical settlement, you need to maintain a free ledger balance of Rs 5 Lakh in your account, else physical settlement would not be done.

Long - 1 lot of Reliance, 250 quantity for Strike price of Rs. 2000 Put (PE) Options.

If the underlying price of Reliance is lesser than strike price of Rs. 2000, then the contract is said to be ITM (In-The-Money). If you wish to go for physical settlement, you need to provide the Stocks (shares) equal to the lot quantity positioned to be available in Demat account, else physical settlement would not be done.

Please note -- 

• Short ITM PE options, treatment would be similar to Long ITM CE options.
  Free ledger balance equal to the contract value to be maintained.
• Short ITM CE options, treatment would be similar to Long ITM PE options.
  Holdings shares of lot quantity positioned to be available in Demat account.

What is the process for Physical Settlement on Upstox?
To opt for physical settlement on Upstox, you need to provide your consent first and here are the details for the same:

• To provide your consent for physical settlement of open Stock F&O contract(s) with May-2021 expiry visit the ‘Profile’ section on your Upstox account on our App / Web and give your consent from here before EOD on Tuesday, 25th May 2021.
• Based on your consent, Upstox will evaluate whether your position qualifies for physical settlements and if there is sufficient  ledger balances / holdings (whichever applicable) is available.
• Kindly plan your trades keeping in mind that you will not be able to trade in fresh positions in the current 27-May-2021 expiry F&O from Wednesday onwards. 
• Correspondingly, position conversion(s) on carry forward of any stock futures positions shall also not be permitted.

What other impact could this have on your positions?
Your position will automatically be squared off in case:

• You have not provided your consent for physical settlement
• You provided your consent for physical settlement and do not have Ledger Value (equal to contract value) / holdings available for the physical settlement of your positions.
• In a case of funds / holdings not being available for all the open positions, we will execute square offs for all the positions. Thus no partial funds / holdings evaluation for the expiring positions will be considered by our team.

What else to keep in mind?
Delivery margins would be applicable as per Exchange norms on all the existing long ITM (In The Money) stock option positions in a staggered manner as explained below:

• 10% of delivery margins computed on expiry -4 days EOD (Friday)
• 25% of delivery margins computed on expiry -3 days EOD (Monday)
• 45% of delivery margins computed on expiry -2 days EOD (Tuesday)*
• 70% of delivery margins computed on expiry -1 day EOD (Wednesday)*

• To avoid margin shortages, Upstox would be blocking such (above mentioned) delivery margins from Beginning of the Day (BOD) instead of End of the Day (EOD).
• If the positions are not squared off for any reason (e.g: non-liquidity), then the contract would have to be settled physically and you would be liable to pay the entire amount of the settlement.

* If you have opted for physical settlement, you would be required to fulfil the entire funds (contract value) / holdings requirement by Tuesday i.e. 25th May 21 EOD.

In case of spread contracts, you are advised to provide margins for both the legs  since the risk of one leg square off by you anytime would result in physical settlement of the other leg.

And that’s all. Keep a watchful eye on this page for more updates from Upstox!