Ex- Dividend Date

A listed company when declaring dividend, fixes a record date. Record date is the date where all the shareholder’s registered with the company on this specific date are eligible to receive dividend. As soon as the company declares the record date, the exchange fixes an ex-dividend date which is usually two business days before the record date. Any stock purchased on or after the ex-dividend date is not eligible for dividend.

This ex-dividend date is fixed by the exchange because the delivery takes T+2 days to settle and legally trade hands. An investor wishing to purchase the shares to receive the dividend should buy the shares a day before the ex-dividend date or three business days before the record date.

An example of dividend dates for Mahanagar Gas is:

Note: Here, the ex-dividend date is four days prior to the record date because 8th and 9th September are weekends and non-business days.

Thus, in the above case, any shares bought by the company, before 7th September will be eligible for dividend, but shares bought on or after 7th September will not be eligible to receive dividend.