Dividends, Bonus Issues: TCS, LIC, Bajaj Auto Among 30 Stocks Turning Ex-Date This Week
This week, more than 30 major companies, including Tata Consultancy Services (TCS), Life Insurance Corporation of India (LIC), and Bajaj Auto, will see their shares turn ex-date for dividends, bonus issues, and stock splits. Investors who want to benefit from these corporate actions must hold the shares in their demat accounts before the record date. Missing this deadline means losing eligibility for the payout or extra shares.
A stock turning ex-date means it trades without the value of the upcoming corporate benefit. For example, if a company declares a dividend of Rs 10 per share, the stock price will drop by roughly Rs 10 on the ex-date. This adjustment ensures that new buyers do not get the dividend. Similarly, for a bonus issue, the stock price adjusts lower to reflect the increased number of shares.
What Are Record Date and Ex-Date?
The record date is the cutoff date set by a company to determine which shareholders are eligible for dividends, bonus shares, or stock splits. To be eligible, investors must have the shares in their demat account by the end of the record date. The ex-date is usually one business day before the record date. On the ex-date, the stock trades without the benefit. If you buy the stock on or after the ex-date, you will not receive the dividend or bonus shares.
For example, if a company sets the record date as Friday, the ex-date will be Thursday. Investors who buy the stock on Thursday will not get the benefit. Only those who owned the stock before Thursday will be eligible.
Key Stocks Turning Ex-Date This Week
Among the prominent names, TCS, LIC, and Bajaj Auto are scheduled to trade ex-date for their dividend payouts. TCS, India’s largest IT services company, has announced a final dividend of Rs 27 per share for the financial year 2023-24. LIC, the country’s largest insurer, will pay a dividend of Rs 6 per share. Bajaj Auto, a leading two-wheeler and three-wheeler manufacturer, has declared a dividend of Rs 80 per share.
Other notable companies include Hindustan Unilever, which will trade ex-date for a dividend of Rs 18 per share, and Reliance Industries, which will go ex-date for a bonus issue in the ratio of 1:1. This means shareholders will get one additional share for every one share they hold. Stock splits are also on the list, with companies like Avenue Supermarts (DMart) splitting one share into five.
How to Check Eligibility
Investors can check the record date and ex-date for each stock on the websites of stock exchanges like BSE and NSE. The company’s official announcement also provides these details. It is important to note that the list of stocks turning ex-date is tentative. More companies may announce record dates for dividends, bonus issues, and stock splits during the week. Therefore, investors should stay updated with corporate announcements.
For example, if a company announces a bonus issue after the list is published, its ex-date will be added later. Similarly, some companies may change their record date. Always verify the information from official sources before making any investment decision.
Why Corporate Actions Matter for Investors
Corporate actions like dividends, bonus issues, and stock splits are important for investors because they affect the value of their holdings. Dividends provide direct cash income. Bonus issues increase the number of shares held without any additional cost, though the total value remains the same initially. Stock splits make shares more affordable for retail investors by reducing the price per share.
For instance, if you hold 100 shares of a company trading at Rs 2,000 each, a 1:1 bonus will give you 200 shares, but the price will adjust to around Rs 1,000 per share. Your total investment value remains unchanged. However, bonus issues and splits often signal confidence from the management, which can boost investor sentiment.
Risks to Keep in Mind
While corporate actions can be beneficial, investors should not buy stocks solely for the dividend or bonus. The stock price adjusts on the ex-date, so you may not gain anything extra. In fact, if the stock price falls more than the dividend amount, you could lose money. Always consider the company’s fundamentals, financial health, and long-term prospects before investing.
For example, if a company with weak earnings announces a high dividend, the stock may fall sharply after the ex-date. Similarly, a bonus issue does not create new value; it only splits the existing value into more shares. Therefore, focus on the overall investment strategy rather than short-term corporate actions.
Final Takeaway
This week offers opportunities for investors to benefit from dividends, bonus issues, and stock splits from top companies like TCS, LIC, and Bajaj Auto. However, ensure you hold the shares in your demat account before the record date. Stay updated with corporate announcements as more companies may join the list. Remember, corporate actions are just one factor in investment decisions. Always do your own research or consult a financial advisor.
