You will receive the dividends issued by the company on the dividend payout day. Once a company decides to issue dividends, it follows the below timeline:
Dividend declaration date:This is the day that the company announces its intent to issue dividends. Usually, this is when the company’s AGM/EGM takes place, and the company’s board approves the dividend issue.
Record date: The date the company decides to review the shareholder’s register to list all eligible shareholders for the dividend.
Ex-dividend date: Once the company sets the record date, the ex-dividend date is set based on stock exchange rules. As per the T+1 settlement, the ex-dividend date for stocks is now the same as the record date. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment.
Dividend payout date: This is the day that the dividends are paid to the shareholders listed in the company register.
Note: To collect a stock’s dividend you must own the stock at least 1 (one) trading day before the ex-dividend date or the should be on the books on the record date.
For example, assuming no market holidays in this duration, company ABC declares a dividend of ₹10 on 1st February 2023. It declares the record date as 2nd March 2023 and the dividend payout date as 31st March 2023. In this case, the investor should note that the ex-dividend date will also be 2nd March 2023.
