ZIM Integrated Shipping Services Ltd (ZIM)

[WMsince2008]

I found out : if buy 2 days before the ex-dividend date will receive dividend payout

Difference between the ex-dividend date and record date

As explained above, the ex-dividend date is the date on which the cutoff point for a pending stock dividend happens. If you have bought a stock one day before the ex-dividend date, you will be eligible to get the dividend amount. However, if you buy the stock on the ex-dividend date or after the ex-dividend date, you won’t be eligible to receive the dividend. Furthermore, if you want to receive the dividend and still sell the shares, you can only sell the stocks after the ex-dividend date.

On the other hand, the record date is the date on which the company identifies and makes a list of all the current shareholders. On this day, it determines the individuals who are eligible to receive the dividend amount. If you are not holding the shares on this date, you will not receive the announced dividends. As SEBI follows a T+2 settlement process, you need to buy the shares of a company at least three days before the record date or two days before the ex-dividend date.

Buying shares: Before the ex-dividend date or after the ex-dividend date?

Suppose a company has announced that it will be paying dividends in the coming months. Your aim is to make profits based on the offered dividend amount. However, you realise that you missed the ex-dividend date and can no longer be eligible for the dividend amount. What can you do now?

If you have missed the ex-dividend date, there is not much that you have missed regarding the short term profit. It is because the shares of a company decline by the value of the dividend offered by the company. For example, if the company’s share price was Rs 500, and it announced a Rs 30 dividend per share, its share price will decline by Rs 30 after the ex-dividend date. Now, you can realise the same profit as you would have with the dividend amount.

Importance of ex-dividend date

As the stock loses its dividend value after the ex-dividend date, the days before the date are very important for the company and its investors. Before the day, the stocks carry the value of the dividend, meaning that it has the potential to offer profits to anyone who buys the shares in the coming days before the ex-dividend date.

Due to this benefit, the stock prices increase based on the rupee value of the announced dividend. If the stock price crosses the dividend value, it makes up for a profit-making good opportunity for current investors. Hence, the ex-dividend date offers the dual benefit of temporary capital appreciation and the promise to receive the dividend on the payable date.

Final word

The ex-dividend date is a vital factor for investors who want to manage and adjust their holdings. Furthermore, the ex-dividend date also allows investors who want to make quick profits to identify the right time to buy the shares of the company that has announced a dividend payout.

Once you know the ex-dividend date, you make an investment strategy, buy shares of such companies, and sell them after you have received the dividend account. However, this transaction needs a Demat and trading account. You can open a free Demat and trading account by visiting the IIFL website or downloading the IIFL Markets app from the app store to begin your trading journey.
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