Tata Technologies, Ireda To Enter F&O Segment From Feb 28 - What It Means For The Shares

Shares of Tata Technologies and Indian Renewable Energy Development Agency (Ireda) jumped up to 5 per cent on the NSE on Thursday, February 20 after the exchange said futures and options (F&O) contracts will be available for trading in these two securities from February 28.

In a circular released on February 19, the NSE mentioned that investors will be able to trade F&O contracts for the two securities starting with the March series. Notably, the current series is set to expire on February 27.

Six securities were added to the F&O segment during the February series, following the expiry of the January series. These included Castrol India, Gland Pharma, NBCC, Phoenix, Solar Industries India, and Torrent Power.

“Members are hereby notified that the futures and options contracts on Ireda and Tata Technologies securities would be available for trading w.e.f. February 28, 2025, subject to fulfilment of eligibility criteria of Quarter sigma computation cycle of February 2025,” the NSE circular read.

The circular also mentioned that details about the market lot and strike prices for these two stocks will be shared on February 27, through a separate circular. Further, the details of the applicable quantity freeze will be available in the contract file which shall be applicable for trading on February 28.

Futures and options are financial contracts that allow traders to bet on the price of an asset without owning it. In a futures contract, both the buyer and seller are obligated to complete the trade at a set price and date. In options, the buyer has the right (but not the obligation) to buy or sell the asset at a predetermined price, and the seller must honour the contract if the buyer chooses to exercise the option.

Tata Technologies, Ireda Jump Up To 5 Per Cent

Tata Technologies’ shares jumped as much as 4.7 per cent to the day’s high at Rs 764 on the NSE. Ever since the Tata Group’s arm made its debut on the stock exchanges, it has been on a declining trend. The stock had fallen over 49 per cent from its all-time high of Rs 1400, hit on the very day of listing, November 30, 2023. It is now rebounding from its all-time low of Rs 711.20, touched on February 18.

Ireda’s shares also climbed 3.17 per cent to hit the day’s high at Rs 175.60 on the NSE. The stock made its debut on the exchanges on November 29, 2023. From its listing price of Rs 50 per share, the PSU stock rallied a massive 520 per cent to hit its all-time high of Rs 310, hit on July 15, 2024. Since then, it has been on a downward trend and is currently trading with a discount of 44 per cent from its record high.

What It Means For Shareholders?

According to Ravi Singh, Senior Vice President of Retail Research at Religare Broking, this inclusion of Ireda and Tata Technologies in the F&O is expected to significantly impact their trading volumes.

Singh said, "On the charts, Ireda does not appear strong at the moment." He advised to avoid adding this stock to the portfolio at its current valuation. "For those considering fresh entry into Ireda, it would be prudent to wait for 195-197 zone, as this level represents a major hurdle for the stock’s upward movement," he recommended.

On the other hand, he said, "Tata Technologies stands out both fundamentally and technically. The stock has recently shown a remarkable reversal from its all-time low levels, making it an attractive buy."

"Additionally, its addition in the March F&O series is likely to further boost its volumes. Overall, Tata Technologies presents a more favourable opportunity compared to Ireda at this stage," he said.