Polycab India Drops Over 5% as NSE Announces F&O Exclusion From December 30

Shares of cables and wires manufacturer Polycab India tumbled more than 5% in Tuesday's trade, touching an intraday low of ₹7,955 on the National Stock Exchange (NSE). The sharp decline followed an exchange notification confirming the exclusion of Polycab India from the equity futures and options (F&O) framework, effective December 30, 2026.

The regulatory action was triggered by the stock's inclusion under the Insolvency and Bankruptcy Code (IBC) surveillance framework, which standardises surveillance and derivative restrictions for companies subject to insolvency proceedings.

Key Dates and Trading Rules

The NSE circular has outlined a phased unwinding process for derivative traders to square off or carry forward existing commitments before the final cutoff:

• October, November, and December 2026 Expiries: Unexpired contracts for October, November, and December 2026 will continue to trade normally until their scheduled expiration dates. New strike prices will continue to be introduced within these active monthly expiries.
• Discontinuation of New Expiries: No fresh contracts for subsequent expiry months will be introduced following the expiration of the October 2026 contracts.
• 100% Margin Requirement: Starting on a T+2 basis, a 100% margin will be applied to all open derivative positions as of October 13, 2026, as well as any new positions created from October 14, 2026.
• Final F&O Exit: With effect from December 30, 2026, no derivative contracts will be available for trading in Polycab India.
• Surveillance Measures from January 1, 2027: Post-derivative expiry, the cash equity segment will be placed under advanced IBC framework surveillance measures, including stricter price bands and gross settlement procedures.

Insolvency Dispute and Legal Backdrop

The exchange circular stems from an order passed on October 7 by the Ahmedabad Bench of the National Company Law Tribunal (NCLT), which admitted a Corporate Insolvency Resolution Process (CIRP) plea filed by operational creditor Asier Metals Private Limited over an alleged debt of ₹2.79 crore under Section 9 of the Insolvency and Bankruptcy Code.

However, Polycab India quickly appealed before the National Company Law Appellate Tribunal (NCLAT). The appellate tribunal stayed the NCLT order and kept it in abeyance pending further hearings, noting the company's submission that a pre-existing dispute existed over credit notes and invoices. Polycab also offered to deposit the entire disputed claim amount of ₹2.79 crore via a fixed deposit receipt in the name of the NCLAT Registrar. Despite the judicial stay, standard market surveillance guidelines under exchange and SEBI rules require automatic implementation of F&O restrictions once an admission order is issued.

Market Implications for Investors

The immediate fallout for market participants is a sharp rise in financing costs and margin pressure on existing derivative positions. The 100% margin rule forces leveraged positional traders to either inject significant fresh capital or unwind open long and short positions, exacerbating intraday volatility.

Over the medium term, exclusion from the F&O segment typically curbs speculative volumes and reduces foreign institutional interest that relies on equity derivatives for delta hedging and cash-futures arbitrage. While Polycab's underlying business fundamentals and recent operational performance remain robust, the stock is expected to experience lower trading liquidity and higher cash-segment delivery scrutiny over the coming quarters.

Tags: Polycab India NSE Nifty 50 NCLAT SEBI F&O Segment