Havells India Sees Surge in Put Option Activity Amid Bearish Market Sentiment

Put Option Activity Highlights Havells’ Bearish Outlook

On 21 Jan 2026, Havells India Ltd. (NSE: HAVELLS) emerged as the most active stock in put options, with the 27 Jan 2026 expiry seeing a significant surge in contracts. The strike price of ₹1,300 attracted 5,361 put contracts, generating a turnover of ₹439.07 lakhs. Open interest at this strike stands at 1,375 contracts, underscoring sustained investor interest in downside protection or speculative bearish bets.

The underlying stock price currently hovers at ₹1,300, aligning precisely with the strike price of the most traded put options. This convergence indicates that traders are positioning for potential further declines or volatility around this level as expiry approaches.

Price Performance and Technical Weakness

Havells India has been under pressure, hitting a fresh 52-week low of ₹1,304.7 on the day of reporting. The stock has underperformed its sector, Electronics & Appliances, by 0.81% and the broader Sensex by 2.93% on the same day. Over the past two trading sessions, Havells has declined by 9.82%, reflecting sustained selling pressure.

Technically, the stock is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a bearish trend across multiple timeframes. The sector itself has also weakened, with the Cable segment down 2.16%, adding to the negative momentum.

Rising Investor Participation and Liquidity

Investor participation has notably increased, with delivery volumes surging to 19.98 lakh shares on 20 Jan 2026, a 210.1% rise compared to the five-day average. This heightened activity suggests that market participants are actively adjusting their positions amid the stock’s recent weakness.

Liquidity remains robust, with the stock’s traded value supporting trade sizes up to ₹4.25 crore based on 2% of the five-day average traded value. This ensures that both institutional and retail investors can execute sizeable trades without significant market impact.

Mojo Score and Analyst Ratings Reflect Caution

Havells India’s current Mojo Score stands at 38.0, categorised as a Sell grade, a downgrade from its previous Hold rating on 20 Jan 2026. This shift reflects deteriorating fundamentals and technical indicators, signalling caution to investors. The company’s market cap remains substantial at ₹84,303 crore, placing it firmly in the large-cap segment, but the low Market Cap Grade of 1 indicates limited upside potential relative to its size.

Such a downgrade often prompts increased hedging activity, as evidenced by the surge in put option volumes. Investors appear to be protecting gains or speculating on further downside, particularly with the expiry date looming on 27 Jan 2026.

Expiry Patterns and Strike Price Concentration

The concentration of put option activity at the ₹1,300 strike price is telling. It suggests that traders view this level as a critical support zone, with significant downside risk if breached. The expiry on 27 Jan 2026 is just days away, intensifying the focus on this strike as market participants adjust positions ahead of expiry-related volatility.

Open interest data confirms that this strike price is a focal point for both hedgers and speculators. The sizeable open interest of 1,375 contracts indicates that many positions remain open, potentially leading to increased price swings as expiry approaches and traders either roll over or close their positions.

Sectoral Context and Broader Market Impact

Within the Electronics & Appliances sector, Havells India’s underperformance is notable. The sector’s decline of 2.16% on the day contrasts with the broader Sensex’s modest 0.16% fall, highlighting sector-specific pressures. Factors such as input cost inflation, supply chain disruptions, or subdued consumer demand may be weighing on the stock and its peers.

Given Havells’ large-cap status and significant market presence, its price action and option market dynamics often serve as a barometer for investor sentiment in the sector. The heavy put option activity may also reflect broader concerns about near-term earnings or margin pressures.

Investor Implications and Outlook

For investors, the surge in put option activity at the ₹1,300 strike price ahead of the 27 Jan expiry signals a cautious stance. Those holding Havells shares may consider protective strategies such as buying puts or tightening stop-loss levels to mitigate downside risk. Conversely, traders with a bearish outlook might view the current option market dynamics as an opportunity to capitalise on expected volatility or further price declines.

However, it is important to balance this bearish positioning with the stock’s long-term fundamentals and sector outlook. While the current technical and sentiment indicators are negative, Havells remains a large-cap player with established market presence and brand strength in the Electronics & Appliances industry.

Market participants should monitor upcoming earnings announcements, sectoral developments, and broader macroeconomic factors that could influence Havells’ trajectory beyond the immediate expiry horizon.

Summary

In summary, Havells India Ltd. is currently experiencing significant bearish positioning as reflected by heavy put option volumes at the ₹1,300 strike price for the 27 Jan 2026 expiry. The stock’s recent decline to a new 52-week low, downgrade to a Sell rating, and technical weakness underpin this cautious sentiment. Increased investor participation and liquidity facilitate active trading and hedging strategies. While the near-term outlook appears challenging, investors should weigh these signals against the company’s long-term prospects and sector dynamics.

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