Bonus related doubts.

#1
Hi All,

First of all, am very fortunate to see this forum, which really helped me to learn about the share market from the very scratch. Joined this community very long back and have not posted even a single thread till today, coz, i didnt get a reason till today. Almost all of my question are already answered, for that, all i have to do is to search the forum with lil patience and go through the threads.

Thanks to all the brain..ies.... ;).

My doubts...

1)if i buy a share before ex-date and sell it on the day after record-date , am i entitled to received bonus shares?
2)what is the maximum time , that the system takes to credit the bonus share in the dp account.?
3)Is there anyway, we can know the information about this settlement of bonus share, through some respective body?
4)they say, theoritically, when a company anounces bonus, on the ex-date, the price will be halved. why?
5)But practically, most of the company's share price is not halved even after the record-date, sometimes or most of the times, it moves only in upwards direction. why?

Still 'm a newbie... sorry if my questions are very silly.

Thanks again.
Hariom...
 
#2
Yes i understood myself to some extent.

1)Yes, shares should be bought before "EX-DATE" and can be sold immediately when you receive that share in the DP account.(i.e, T+2 days).
If shares are bought earlier, and if you are able to sell it on EX-DATE, still you are eligible for the bonus shares.

2)usually, to get the bonus shares in our Demat account, it will take 15 to 30 days from record date.

3)---

4)share price is halved only if the ratio is 1:1 when bonus issue on the EX-DATE. will clarify, for other ratios if needed.

5) Wrong assumption.

Hariom...
 

rvm123

Active Member
#3
1) On the ex-date, the rates will be adjusted for the bonus. Hence, if you have got the shares on the previous date in your demat account, you are eligible for the bonus. Suppose, u r having 100 shares in your demat a/c and the company announces 1:2 bonus, you are eligible to get 50 shares if you are holding the 100 shares in your demat account on the record date. On the ex-date you can sell those 100 days; still u will get the bonus 50 shares
2) 15-30 days depending on the company
3) You can ask your brokers; if u know some body else who are holding the company's shares, u can interact with them; u can know through some of the websites / discussion forum sits, etc
4) If the bonus ratio is 1:1, the share price may fall down by about 50% approximately; if the ratio is different, the price fall also may be different, in line with the ratio
5) If the company's fundamentals are good and if investors believe that even after the bonus issue, the company's workings will be very good and if the market trend is in the upswing, rates may go upward
 

deadbrain

Well-Known Member
#5
Hi helpers!

My question is when should one buy shares so that he is eligible to receive dividend? And yes, if one sells the shares on the ex-record date, will he receive the same?
 
#7
To be eligible for Dividend, you have to buy before ex-date.
If you sell on ex-date, you will receive the dividend.
Evilboy, when you say before ex-date, in case the ex-date is 03/09/10, if one buys the stock on 02/09/10, it will be credited to the buyer's account on 04/09/10, so should it not be that the buyer has to buy 31/08/10 for it to be credited to the buyer's account on 02/08/10 hence get dividend and then sell it on ex-date i.e. 03/09/10, could you clarify.
 

Evilboy

Active Member
#8
Evilboy, when you say before ex-date, in case the ex-date is 03/09/10, if one buys the stock on 02/09/10, it will be credited to the buyer's account on 04/09/10, so should it not be that the buyer has to buy 31/08/10 for it to be credited to the buyer's account on 02/08/10 hence get dividend and then sell it on ex-date i.e. 03/09/10, could you clarify.
You should be holding the stock on record date. Record date is chosen by the company issuing the bonus and ex-date is decided by the exchange. Generally the ex-date will be 2 days before the record date. If the ex-date is 03/09/10 then the record date will be 05/09/10. So, if you buy on the 2nd then the stock will be in your account on the record date.
 

rvm123

Active Member
#9
that is the reason, just before the record date, 2 or 3 days period will be no-delivery dates, during which time, all the deliveries of earlier trade will be made and on the record date, the list of script holders will be made and bonus / dividend, etc will be made
 

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