Sebi's proposed tweaks likely to lead to big churn in F&O stocks

The proposed selection criteria by the market regulator could lead to the inclusion of popular stocks like LIC, Jio Financial Services, Zomato, and Paytm into the derivatives segment, reshaping India's over Rs 400-trillion-a-day F&O market. Around two dozen stocks may exit due to higher eligibility thresholds, with names like Bata and Granules India likely to be affected. \r

New-age companies and market intermediaries are set to become eligible for F&O trading. Speculations regarding entry into F&O have already influenced stock prices. The proposed changes aim to remove stocks with consistently low derivatives turnover. Sebi has invited public comments on the proposal until June 19, suggesting potential approval by the end of the month. \r

Once implemented, the revised criteria will require higher turnover and market-wide position limits for inclusion in the F&O segment.