Shares of PVR Ltd fell close to 4 percent on Tuesday after the National Stock Exchange (NSE) today said that the stock, among other three, will be banned from trading in the futures and options segment after these securities crossed 95 percent of the market-wide position limit.

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At 10:00 am, shares of PVR were trading 3.67 percent lower, or down 69.15 points, at Rs 1,814.35 on the BSE.

PVR, which announced a merger with its competitor Inox Leisure, is the latest addition to the ban list which dropped Indiabulls Housing Finance, L&T Finance Holdings, and SAIL.

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"All clients/members shall trade in the derivative contracts of said security only to decrease their positions through offsetting positions. Any increase in open positions shall attract appropriate penal and disciplinary action,” the NSE said.

Traders are not allowed to take fresh positions in such stocks during the ban, although they can begin to reduce their existing positions. The F&O ban rule serves to curb stock speculations.

The maximum number of outstanding open positions (buy and sell) in a security's F&O contracts is the market-wide position limit, which is set by stock exchanges. When a stock's open interest exceeds 95 percent of the market-wide position limit, the stock's F&O contracts enter the ban period.

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On Monday, PVR stock tested its 52-week high at Rs 2,010.35 after INOX Leisure and PVR – two of India’s biggest cinema exhibition brands announced they would merge their might to deliver an “unparalleled” consumer experience with a network of more than 1,500 screens.

Their joint statement indicates that the onslaught of over-the-top (OTT) or streaming platforms had a role to play in the consolidation.

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First Published:Mar 29, 2022 10:28 AM IST