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Dividend Record Date and Ex-Dividend Date

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In our earlier lessons, we have framed a rule.

Rule 8 says we prefer companies with good Dividend and Dividend Yield.

When it comes to dividends, there is often some confusion to new investors in regard to two dates.

Two commonly confusing date terms in regard to Dividend announcements are Ex-dividend date and Record date.

Ex-dividend date is a date that is set by stock exchange. It is usually 2 trading days earlier to record date.

Record date is set by company Board of Directors in consultation with the Registrar.

It is the date by which you need to have your shares in the demat so as to get the Dividend.

Shares bought on and after the Ex-dividend date are not entitled to receive the dividend which is the reason why share prices usually adjust downward on the Ex-dividend date.

So, in order to be eligible for dividend, ensure that the shares are in your demat account as early as possible.


For example, take the share current market price is Rs. 100 and dividend announced is Rs. 2.

On Ex-dividend date, the CMP will be made Rs. 98.

After record date, the Rs. 2 is paid as dividend.

Let us take a practical example.

Hindustan Petroleum Corporation Ltd has informed BSE that the Company has fixed July 12, 2017 as the Record Date for the purpose of Payment of Dividend & Bonus Issue.

So by July 12, 2017 (Wednesday) the shares should be in your demat.

So, the last date that you can buy the shares so as to become eligible for dividend is July 7 (Friday).

July 8 is Saturday, July 9 is Sunday. Both days are non trading/working days and are not counted.

July 10 is T+1 day.

On July 11, T+2 day, the shares will come to demat.

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