Ex-Date

## What the ex-date is When a company declares a corporate action — a dividend, bonus issue, stock split, or rights entitlement — there's a key boundary date called the ex-date (short for ex-dividend / ex-bonus etc.). To be eligible for that benefit, you must own the shares before the ex-date. If you buy a share on or after the ex-date, the seller (not you) keeps the right to the corporate action; the stock now trades "ex" — without that entitlement.

## Ex-date vs record date in India With India's T+1 settlement, the ex-date and record date are now effectively the same day. The record date is when the company checks its register to decide who is eligible. Because shares settle in T+1, the last day to *buy* and still qualify is one trading day before the ex-date/record date. So practically: buy by the day before the ex-date to receive the dividend/bonus; buy on the ex-date itself and you miss it.

## The price adjustment On the ex-date, the stock price typically drops by roughly the value of the benefit — because the buyer no longer gets it. A ₹10 dividend usually sees the price open about ₹10 lower on the ex-date; a 1:1 bonus roughly halves the quoted price (you now have twice the shares). This is a mechanical adjustment, not a loss — the exchange also adjusts F&O contracts and indices accordingly.

## Why it matters - Dividend capture myths: buying just before the ex-date purely to grab a dividend rarely pays, because the price falls by about the dividend amount, and the dividend is taxable in your hands at your slab rate (with TDS above ₹5,000/₹10,000 thresholds), while the price drop may be a notional loss only. - F&O and options traders must track ex-dates because strike and lot adjustments for bonuses/splits and the dividend-driven price drop affect positions. - For bonuses/splits, no real value is created — only the share count and price change.

Practical tip: check the ex-date on NSE/BSE corporate-action calendars. To qualify for a dividend, bonus or split, ensure your buy trade is completed before the ex-date; don't chase dividends solely for the payout, since the price adjustment and tax usually neutralise the gain.