Synopsis: Tata Technologies, Piramal Pharma, Torrent Power, and HUDCO are in focus after NSE announced their phased exclusion from the F&O segment effective April 29, 2026. The move follows SEBI’s stricter eligibility norms aimed at improving liquidity quality, reducing speculation, and strengthening risk management in the derivatives market.
The NSE’s move to gradually withdraw futures and options (F&O) contracts in HUDCO, Piramal Pharma, Tata Technologies, and Torrent Power stocks is a major regulatory shift in the derivatives market. As per the circular, new contracts will not be added in new expiry months, and all derivatives trading in these stocks will be stopped after April 29, 2026. However, existing contracts for February, March, and April 2026 will be allowed to trade until their respective expiration dates.
| Stocks | Market Cap | % Fall |
|---|---|---|
| Piramal Finance Ltd | 39,326 Crore | 2% |
| Tata Technologies Ltd | 23,719 Crore | 3% |
| Torrent Power Ltd | 77,803 Crore | 1% |
| HUDCO | 38,266 Crore | 2% |
Tough Eligibility Criteria Turns Derivatives Market Upside Down
The above development is in line with SEBI’s revised eligibility criteria for stocks in the F&O market, announced in August 2024. As per the revised criteria, stocks must be in the top 500 based on six-month average market capitalisation and turnover, besides other criteria like Rs 75 lakh MQSOS, Rs 1,500 crore MWPL, and Rs 35 crore ADDV. Missing any of these criteria will lead to delisting.
The regulatory agenda is obviously focused on enhancing liquidity quality and minimising systemic risks in the derivatives segment. By weeding out stocks with lower delivery quantities or a lack of market depth, SEBI is clearly trying to discourage price manipulation and speculative activities, which are commonly observed in less liquid stocks. The application of the Product Success Framework to stock derivatives also enhances regulatory control by reviewing liquidity and participation every month.
From a market point of view, non-inclusion in F&O trading may have a dual effect. While it may help suppress speculative price volatility, it may also affect trading activity and hedging options in the short run. Market participants may adjust their portfolios before the April series of expiries, leading to temporary price actions.
The staggered process of discontinuation is clearly a part of a larger paradigm shift towards a more disciplined and risk-managed derivatives market. By emphasising the need for deeper liquidity, broader participation, and more robust risk management, SEBI and NSE are clearly sending a positive signal about long-term market stability and investor confidence.
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