Indus Towers Sees Heavy Put Option Activity Amid Mixed Market Signals

Robust Price Performance Contrasts with Bearish Option Interest

On 9 January 2026, Indus Towers Ltd (stock code 433635) recorded a strong intraday performance, hitting a new 52-week high of ₹454.95. The stock outperformed its sector by 1.37% and opened with a gap-up of 4.44%, continuing a two-day rally that has delivered approximately 3% returns. It currently trades above all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling a sustained bullish momentum from a technical perspective.

Investor participation has also risen, with delivery volumes on 8 January reaching 55.57 lakh shares, a 7.08% increase over the five-day average. Liquidity remains healthy, supporting trade sizes up to ₹7.33 crore comfortably. Despite these positive indicators, the options market reveals a more nuanced picture.

Put Options Activity Highlights Bearish Hedging and Caution

Data from the derivatives segment shows that Indus Towers is among the most actively traded stocks in put options, particularly for the 27 January 2026 expiry. Two strike prices have attracted substantial put contracts: ₹440 and ₹450.

At the ₹440 strike, 2,806 contracts were traded, generating a turnover of ₹490.38 lakh, with open interest standing at 874 contracts. Meanwhile, the ₹450 strike saw 2,448 contracts traded, with a turnover of ₹601.35 lakh and open interest of 660 contracts. The underlying stock price at the time was ₹442.40, placing these strikes close to the money and indicating significant investor interest in downside protection or speculative bearish bets.

The heavy put option volumes at these strikes suggest that market participants are either hedging existing long positions or positioning for a potential pullback in the near term. This is particularly notable given the stock’s recent strong price action, implying a degree of caution or anticipation of volatility ahead of the expiry.

Mojo Score Upgrade Reflects Improving Fundamentals

Indus Towers currently holds a Mojo Score of 67.0, reflecting a 'Hold' rating, upgraded from a previous 'Sell' grade on 7 November 2025. This improvement indicates a stabilisation in the company’s fundamentals and market outlook, although the score suggests investors should maintain a cautious stance rather than aggressively accumulate.

The company’s market capitalisation stands at a substantial ₹1,13,652 crore, categorising it firmly as a large-cap stock within the Telecom Equipment & Accessories sector. Despite the upgrade, the Market Cap Grade remains at 1, signalling limited room for rapid capital appreciation in the near term.

Sector and Market Context

On the day of reporting, Indus Towers delivered a 2.04% return, outperforming the sector’s 1.54% gain and the broader Sensex, which declined by 0.19%. This relative strength underscores the stock’s resilience amid mixed market conditions. However, the pronounced put option activity suggests that some investors are wary of potential volatility or a correction, possibly due to broader macroeconomic uncertainties or sector-specific challenges.

Expiry Patterns and Investor Sentiment

The expiry date of 27 January 2026 is attracting concentrated put option interest, which often serves as a barometer for near-term market sentiment. The clustering of open interest and turnover around the ₹440 and ₹450 strikes indicates that traders are actively managing risk around current price levels. This could be interpreted as a hedging strategy by institutional investors or speculative positioning by traders anticipating a downside move.

Given the stock’s recent rally and technical strength, the elevated put volumes may also reflect profit-booking or cautious positioning ahead of potential earnings announcements or sector developments. Investors should monitor open interest changes closely in the coming sessions to gauge whether bearish sentiment intensifies or dissipates.

Investor Takeaway: Balancing Optimism with Prudence

Indus Towers Ltd’s recent price strength and technical indicators suggest a positive near-term outlook, supported by rising investor participation and a Mojo Score upgrade. However, the pronounced put option activity near current price levels signals that market participants are hedging against potential downside risks or preparing for volatility around the January expiry.

For investors, this mixed signal advises a balanced approach. Those holding long positions may consider protective strategies such as buying puts or tightening stop-loss levels. Meanwhile, prospective buyers should watch for confirmation of sustained momentum before committing fresh capital, given the possibility of short-term corrections.

Overall, Indus Towers remains a key stock to watch within the Telecom Equipment & Accessories sector, with its large-cap status and improving fundamentals making it a core holding for many portfolios. Yet, the options market activity underscores the importance of risk management in the current environment.

Looking Ahead

As the 27 January expiry approaches, monitoring changes in open interest and put-call ratios will be crucial to understanding evolving market sentiment. Any significant shifts could provide early signals of directional moves or volatility spikes. Additionally, sectoral developments, regulatory updates, and broader market trends will continue to influence Indus Towers’ trajectory.

Investors should remain vigilant and consider integrating derivative strategies to hedge exposures or capitalise on anticipated moves, leveraging the liquidity and active options market surrounding this stock.

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