Dividend record date vs ex-date, explained
When a company announces a dividend, bonus issue or stock split, it names a record date. To get the benefit you need to own the shares on that date, and that means buying before the ex-date.
The record date
The record date is the day the company checks its list of shareholders. Everyone on the register at the end of that day gets the dividend, bonus shares or split shares.
The ex-date
Because shares take time to settle into your demat account after you buy them, there's a cut-off before the record date: the ex-date. If you buy on or after the ex-date, you don't get the benefit; the seller does.
India moved to T+1 settlement in 2023: shares bought today reach your account the next working day. Since then the ex-date and the record date are usually the same day. In practice: buy by the day before the ex-date.
What happens to the price
On the ex-date, the stock price is adjusted to reflect what's being paid out.
- Dividend: the price typically opens lower by about the dividend amount, because that cash is leaving the company.
- Bonus issue (e.g. 1:1): you get one extra share for each you hold, and the price halves. Your holding's value doesn't change.
- Stock split (e.g. ₹10 to ₹5 face value): each share becomes two and the price halves, again with no change in value.
So buying just before the ex-date to "collect" a dividend doesn't make money by itself: the price drop offsets it, and the dividend is taxed at your slab rate.
Types of dividend
Interim dividends are declared by the board during the year; the final dividend is approved by shareholders at the AGM; a special dividend is a one-off payout.
Where to find the dates
Companies announce record dates to the exchanges, and NSE publishes the ex-dates. Our dividend calendar lists upcoming dividends, bonus issues, splits and buybacks by ex-date.
For education only. Not investment advice; My Market Desk is not a SEBI-registered investment adviser. Rules and timings change, so check the exchange or regulator for the current position.