Importance of Ex Dividend Date in Indian Dividend Paying Stocks
Posted: Nov 03, 2013
Most of the folks who are connected with financial world knows well about results and stocks. They also know about dividend dates like ex results Date etc. too but probably very few will be aware of that ex dividend date performs a significant part in stocks industry and one can take benefit of this. In Native Indian and some other countries which have similar stock dealing strategies like UK, Australia and New Zealand ex div date plays an essential part for traders.
To better understand this, let us take an example of an organization ABC. Assume ABC has announced ex results time frame as 1 Nov 2013(Friday) and Record Date for this organization for the purpose of results is 3 Nov 2013 considering the Saturday and Sunday as non-trading days in NSE and BSE. Assume dividend paid on each share by organization is 100. Now it should be obvious to everyone that ex div date was created to clear all the awaiting dividends to be paid by the organization.
Now the Key part is that if you wish to get results on the stocks you own, you have to own the stocks before it gets to its ex results time frame. If you do not own any results spending stocks in Native Indian until its ex results time frame, in that situation you will not be qualified for any results attached with stocks you have purchased so ultimately what comes as a conclusion that you should search that kind of Native Indian stocks in Native Indian inventory exchange which are 7 to 10 times apart from their ex results time frame in Native Indian.
More importantly keep in mind too that if an investor purchase a Indian dividend stock on its ex dividend date, in that case he will not be getting dividends from that stock as stocks or shares will be credited to his account after 2 business days. Key for this is always buy a dividend paying stock in India prior to its ex dividend date. This also states clearly that a stock market investor can sell their shares on ex dividend date and still will be eligible to receive dividends from the stocks he would sell because those stocks will be credited to his account till two next days, afterwards they will be transferred to their new buyer. Many People adopt this strategy to earn more income in a short time span and this has proved a beneficial strategy for them also. There is one important thing also and that is on ex dividend date stock prices of company falls up to the margin of the dividend price on per share. Means to say if share was trading on 455 before ex dividend date. It will be on 355 considering the 100 Rs. Dividend on each share
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