Ex Dividend and Record Date

Many investors in India are getting confused about the ex-dividend date and record date. In order to clarify, the following details are given:


As per NSE notices, for Patni computers, 30.8.2010 is ex-div. date and 31.8.2010 is record date for the purpose of dividend which was Rs.63 per share.

Ex-dividend date: In the above case of Patni, the ex-dividend date is 30.8.2010.
The ex-dividend date was created to allow all pending transactions to be completed before the record date. If an investor does not own the stock before the ex-dividend date by payment, he or she will be ineligible for the dividend payout.Within record date, the shares should be credited to investors account. In india, T+2 system is carried out. In Patni case, if any one purchased share on 27.08.10(friday), he will get the shares transferred in his name on 31.08.10(Tuesday).

Note: Saturday and Sunday are non-trading days and hence T=2 days system will apply only to working days.


So he will be eligible for dividend. On 30.8.32010 if any one purchases Patni Computers, it will be ex-dividend as the shares will be credited only on 1.9.2010. So 30.8.2010 is ex-dividend date.


The Ex-Dividend Date is the first day a stock trades without the dividend declared attached to it. If investor buy a stock on the Ex-Dividend Date buyer is not qualified for the dividend. Therefore, if any buyer is very interested in receiving dividends,he must own prior to the Ex-dividend date.This also means he can sell a stock on the Ex-Dividend date and still receive the dividends even though shares have not been placed in his account yet.
The record date: In the above case of Patni Computers is 31.8.2010.


The record date is the date on which investor must be a holder of the stock (i.e., a share holders or unit holders) in order to receive the dividends for the upcoming payment date.