Investors in the Indian stock market need to mark their calendars for a series of corporate actions scheduled for the upcoming week. Several prominent companies, including Tata Consultancy Services (TCS) and Kotak Mahindra Bank, will see their shares trade ex-dividend and ex-split, directly impacting shareholder payouts and stock prices.
Major Dividend Payouts on the Horizon
The spotlight is firmly on India's largest IT services exporter, Tata Consultancy Services (TCS). The company's shares will trade ex-dividend on Monday, January 15, 2024. This is for the third interim dividend of ₹9 per equity share that the board declared. The record date for determining eligible shareholders is set for January 16, 2024. TCS has a strong history of rewarding shareholders, and this ₹9 dividend adds to the ₹17 already paid out in two earlier interim dividends this fiscal year.
Joining TCS on the ex-dividend list is private sector lender Kotak Mahindra Bank. Its shares will also trade ex-dividend on January 15, 2024. The bank has announced an interim dividend of ₹2 per share (face value of ₹5 each) for the financial year 2023-24. The record date for this dividend is also January 16, 2024.
Stock Split and Bonus Share Activity
Beyond dividends, other corporate actions are set to influence trading dynamics. Kotak Mahindra Bank is involved in another significant move—a stock split. The bank's shares will trade ex-split on Friday, January 19, 2024. This action involves subdividing each existing equity share with a face value of ₹5 into five shares, each with a face value of ₹1. The record date for this split is January 20, 2024. Stock splits generally enhance liquidity by making shares more affordable for retail investors.
In the real estate sector, Macrotech Developers Ltd, the company behind the Lodha brand, will also see its shares trade ex-split on January 19, 2024. The company is splitting each equity share of ₹10 face value into ten shares of ₹1 each. The record date for this corporate action is also January 20, 2024.
Furthermore, Shivalik Bimetal Controls Ltd will reward its shareholders with a bonus issue. The company's shares will trade ex-bonus on Monday, January 15, 2024. The record date is January 16, 2024, for the issue of one bonus share for every two existing shares held by investors.
What This Means for Shareholders and Traders
Understanding these dates is crucial for market participants. The ex-date is the day when a stock begins trading without the value of the dividend or corporate action. Typically, the stock price adjusts downward on the ex-date to reflect the payout. Investors who purchase the stock on or after the ex-date will not be eligible for the declared dividend, bonus, or split. Eligibility is determined by the record date, which usually follows the ex-date.
For long-term shareholders, these actions represent direct returns on investment through dividends and an increase in the number of shares held via splits and bonus issues. For traders, these periods can bring heightened volatility and require adjusted strategy as the stock price finds a new equilibrium post the corporate action.
The upcoming week is a busy one for corporate actions, highlighting active capital allocation strategies by leading Indian firms. Investors are advised to check their holdings and consult with financial advisors to understand the full implications of these events on their investment portfolios.
