How to Enter & Exist For Dividends?

[chirag]

Hello Everyone!
I have 100 shares each in Syndicate Bank and Dena Bank respectively. I want to exit them now but they have announced about dividend which i dont want to miss.

1)What is interm dividend? how can i know when a company pays interm dividend?

2)Before how many days should i buy the stock to be eligible for interm/normal dividend? After/Within how many days can i exit and still get the dividend?

(i mean if i buy the stock today and the dividend will be given after 10 days. if i exit on the 8th day will i still get the dividend?)

Yesterday Syndicate bank shot up on this dividend news but since i dont know anything about it i could not close my position as much as i wanted to

I have generally seen stock prices fall after paying dividend. How can i have my cake and eat it too?

Thank You

 

[rvm123]

There will be a board meeting to finalise the interim dividend. If the dates are announced in the Stock Exchange, this is a hint for dividend to be declared in the near future.

After dividend is approved in the board meeting, record date and ex-date will be announced. If you hold the shares on the record date you are eligible for dividend. From the ex-date onwards, whoever buys the scrip, they are not entitled for the dividend.

But having the cake and eating the same is not possible.

 

[cinderblock]

You cannot have your cake and eat it too.

You need to have the shares at the END of the 10th day and the shares will drop the next day (Ex-dividend date).

 

[chirag]

Thank you for your help rvm and cinderblock

rvm, as you said, the record date will be announced. Now if i buy on record date itself, my broker takes 2 days for settlement (sharekhan) will it work even if my position is not settled or should i get in before 2 days of record date?

Also, interm dividend is a dividend, right? or its just an announcement???

Also is there anysite where i can get information about such interm and normal dividends, their record dates and all?

 

[visriv80]

Hi don't know if I should post it in the same thread.. But I have a similar query... What happens to the future price once the dividend is declared ??.. Just saw that coal india share @294 but future contract @278 (news of interim dividend today) ... I mean anyone who bought a future contract is screwed !

 

[rkkarnani]

Hi don't know if I should post it in the same thread.. But I have a similar query... What happens to the future price once the dividend is declared ??.. Just saw that coal india share @294 but future contract @278 (news of interim dividend today) ... I mean anyone who bought a future contract is screwed !

It would depend on when the Dividend is actually PAID, within the current Derivative clearing or in next month's derivative closing.

In case of Coal India the Record Date is 20th Jan. So before Expiry date the underlying and the Future would come at par.

 

[rvm123]

Chirag,

Normally 2 or 3 days before record date, Exchanges notify ex-dividend dates and from that date, whoever buys will not be eligible for dividend. However, the criteria for dividend eligiblity is the date on which a scrip is bought. If the transaction date is cum-dividend, the buyer is eligible for dividend. if the transaction date is ex-dividend, seller is eligible for dividend. It is immaterial whether the scrip is credited to your demat account or not.

Details of dividend, record date, etc will be available in any finance site like moneycontrol, myiris, kotaksecurities, cilsecurites, to name a few. It will also be available on BSE and NSE

 

[visriv80]

So in case of coal india .. If I bought a future contract before dividend news..would I be eligible for dividend payout on expiry ... Seems like record date is before expiry

 

[Mr.G]

So in case of coal india .. If I bought a future contract before dividend news..would I be eligible for dividend payout on expiry ... Seems like record date is before expiry

You are not eligible for dividend if you own F&O and not cash shares.

 

[chirag]

I had brought 100 DenaBank shares since Dec 25. The record date was 24th Jan. However, i did not get the interm dividend either on Jan 24 or 25th. Are such delays usual or should i contact someone?
or dividends dont get payed out on saturdays?