Dividend

Secondary Mkt 1204 views 3 replies

CA. SUJAL MEHTA

Service

3316 Points Posted on 12 July 2010

I have purchased shares of a company on 22.06.2010 and took a delivery on the same date at my online Demat Account.

Now, the company has declared dividend and the book closure for the same will be from 26.06.2010 to 30.06.2010.

Will I entitled for Dividend???

Upto how much time I have to hold shares for getting Dividend and whether I will get physical Dividend Warrant at me address or directly credited into my bank account through ECS?

Replies (3)

Amir

Learner

4016 Points Posted on 12 July 2010

Dear Sir,

The relevant date is the "Record Date" on which investor should be having shares(in his demat a/c) in order to get dividend.

Date of book closure is not relevant.

For info about "record date" , you can log on to the website of NSE / BSE , etc

Nowadays, in case of dematted shares, dividends are generally credited through ECS facility under an intimation to investor.

Juzer Sadikot

CA - innovative solutions for Imports an

1309 Points Posted on 14 July 2010

Dear Mr. Mehta,

Yes, you shall be entitled for dividend as book closure (Also known as no delivery period) is after the date of delivery of shares in your Demat Account.

FYI

Co. which are listed in stock exchange fix the record date & book closure for payment of dividend, issue of right n bonus shares. Book closure is necessitated because in the share market the shares change hands frequently. In order to enable the holder /possessor of the share to receive dividend, right & bonus shares, the company needs to identify the holder as of record date. As the shares change hands frequently, it will not be possible on the part of the company to identify the real holder of the share on the date of dividend distribution.

So, the company declares book closure date, which normally five working days. Shares can be traded during the book closure period but all trades need to be offseted by buying/selling opposite position as it is NDP. That is why no investor buys the shares during book closure period. Those who purchased the shares before the book closure date get the same transferred to their name. This enables the company to identify the share holders for receipt of dividend etc.

Regards

Juzer

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Founder & Director - Holistic Investment

21077 Points Posted on 14 May 2014

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