What are the important dates related to Corporate Actions ?

Some important dates with respect to corporate actions include: 

Declaration Date
The day the corporate action is announced to the public.
Cum date 
The date by which investors must buy and hold shares to be eligible to receive the benefits of the announced corporate action. 
Ex-dateThe date from which a stock starts trading ex-benefit/without the benefits of the corporate action. Investors who buy a share on or after the ex-date will not be eligible to receive the benefits. 
Record date
The date on which company records are taken to determine shareholders eligible to receive the benefits of the announced corporate action. Shareholders who hold shares in their demat account on the record date will be eligible to receive the benefits.

Since we have shifted to the T+1 settlement cycle, the ex-date and record date for corporate actions fall on the same day.

For example, Kotak Mahindra concludes their Annual General Meeting (AGM) on 15th July. A dividend issue at Rs. 18 per share is approved by the Board of Directors and related dates are announced.

  • 15th July is the Declaration Date.
  • 18th August is the Ex-Date. Hence, to be eligible to receive dividends, purchases must be made on or before 17th August.  From the dividend declaration date to the ex-date, the shares are said to be trading cum dividend (with dividend).
  • The Record Date is also on 18th August. So, all shareholders of Kotak Mahindra as per company records on 18th August will receive the dividend payout.
  • The dividend Payout Date is when the dividend is issued to the eligible shareholders. This may be 10-15 days after the record date.

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