Indus Towers Sees Significant Open Interest Surge Amid Mixed Market Signals

Open Interest and Volume Dynamics

On 23 January 2026, Indus Towers Ltd (symbol: INDUSTOWER) recorded an open interest (OI) of 1,00,655 contracts, up from 86,524 the previous day, marking a substantial increase of 14,131 contracts or 16.33%. This rise in OI was accompanied by a trading volume of 48,736 contracts, indicating robust participation in the derivatives market. The futures segment alone accounted for a value of approximately ₹1,99,772.69 lakhs, while the options segment's notional value stood at an impressive ₹15,13,07,11,943 lakhs, culminating in a total derivatives value of ₹2,01,152.39 lakhs.

Price Movement and Market Context

Despite the surge in derivatives activity, the underlying stock price declined by 1.22% on the day, closing at ₹413. This performance was broadly in line with the telecom equipment sector, which fell by 1.52%, though it underperformed the Sensex, which slipped by a more modest 0.23%. The stock’s one-day return was -1.15%, reflecting some short-term selling pressure.

Technically, Indus Towers’ price remains above its 100-day and 200-day moving averages, signalling a longer-term uptrend. However, it trades below its 5-day, 20-day, and 50-day moving averages, suggesting near-term weakness and potential consolidation. This mixed technical picture aligns with the observed open interest surge, which may indicate divergent views among market participants.

Investor Participation and Liquidity

Investor participation appears to be waning slightly, with delivery volumes on 22 January falling by 0.21% compared to the five-day average, registering at 48.42 lakh shares. Nonetheless, liquidity remains adequate, with the stock’s traded value supporting a trade size of approximately ₹7.24 crore based on 2% of the five-day average traded value. This liquidity profile ensures that the stock remains accessible for both institutional and retail traders looking to capitalise on the recent derivatives activity.

Market Positioning and Directional Bets

The sharp increase in open interest, despite a slight price decline, suggests that traders are actively repositioning themselves in Indus Towers’ derivatives. Such a pattern often indicates that participants are either building fresh positions or rolling over existing ones, anticipating potential volatility or directional moves.

Given the stock’s current trading range—above long-term moving averages but below short-term averages—market participants may be hedging against near-term downside risks while maintaining a bullish stance over the medium term. This is consistent with the stock’s recent upgrade in Mojo Grade from Sell to Hold on 7 November 2025, reflecting improved fundamentals and a more balanced risk-reward profile.

Moreover, the company’s large market capitalisation of ₹1,09,325.46 crore and its standing within the telecom equipment and accessories sector make it a key bellwether for investors tracking infrastructure plays in the telecom space. The Mojo Score of 67.0 and a Hold rating indicate cautious optimism, with analysts recognising the stock’s potential but advising prudence amid sector headwinds.

Comparative Sector and Index Performance

Indus Towers’ performance relative to the broader sector and Sensex provides further insight into investor sentiment. While the telecom equipment sector declined by 1.52%, Indus Towers’ smaller drop of 1.22% suggests relative resilience. However, the stock’s underperformance against the Sensex’s 0.23% fall highlights sector-specific challenges, including competitive pressures and regulatory uncertainties.

Investors should also note the falling delivery volumes, which may indicate reduced conviction among long-term holders. This dynamic, combined with the derivatives market activity, points to a market environment where short-term traders and hedgers are more active than fundamental investors.

Implications for Investors

The recent surge in open interest and volume in Indus Towers’ derivatives market signals a period of heightened activity and potential volatility. Investors should carefully monitor price action relative to key moving averages and watch for confirmation of directional trends.

Given the Hold rating and the mixed technical signals, a cautious approach is advisable. Traders may consider using options strategies to hedge exposure or capitalise on anticipated volatility, while long-term investors should keep an eye on fundamental developments and sector dynamics.

Overall, Indus Towers remains a significant player in the telecom equipment sector, with a solid market capitalisation and improving fundamentals. However, the current market positioning suggests that investors are weighing both upside potential and downside risks, making it essential to stay informed and agile in portfolio management.

Outlook and Conclusion

Indus Towers’ derivatives market activity reflects a nuanced investor outlook amid a challenging sector environment. The 16.3% increase in open interest, coupled with steady volume and mixed price signals, points to active repositioning and a search for clarity on the stock’s near-term direction.

While the stock’s long-term technical indicators remain supportive, short-term pressures and falling delivery volumes warrant caution. Investors should balance these factors with the company’s improving Mojo Grade and large-cap status when making investment decisions.

As the telecom equipment sector continues to evolve, Indus Towers’ market behaviour will remain a key barometer for investor sentiment and sector health.

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