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What does record date and ex-date mean?

The ex-date and the record date for all the corporate actions are on the same day since 27th January 2023, since all the instruments are moved to the T+1 settlement cycle. To learn more, see What does settlement cycle mean?

Record date: The record date is when the company checks its records to identify the eligible shareholders for a corporate action. Shareholders holding the shares in their demat accounts on the record date are eligible for corporate actions such as entitlement of rights shares, bonus shares, stock splits, dividends, etc.

Ex-Date: The date on which a stock starts trading without the benefit of corporate action, i.e., ex-benefit, is known as the ex-date. The ex-date and the record date for all the corporate actions are on the same day since all the instruments are moved to the T+1 settlement cycle.  A stock will trade with the benefits of the corporate action or cum-benefit (i.e., cum-rights, cum-dividend, etc.) until the ex-date or the record date.

Example Scenario

If the record date or ex-date for a corporate action is Wednesday, shares must be purchased on or before Tuesday to qualify for corporate action benefits. The stock will trade with corporate action benefits until Tuesday, after which it will trade ex-corporate action starting Wednesday. Shares purchased on Wednesday will not be eligible for corporate action benefits.

For instance, if Stock A announces a dividend of ₹10 with a record date on Wednesday and trades at ₹500 on Tuesday, Wednesday will also be the ex-dividend date, causing the stock price to decrease by the dividend amount, which is ₹10. To learn more about how corporate actions affect stock prices, visit zerodha.com/varsity/chapter/five-corporate-actions-and-its-impact-on-stock-prices.