Next week will see many companies such as Reliance Industries and South Indian Bank trading ex-dividend. Central Depository Services (India) will trade ex-date for a bonus issue, and buybacks are lined up from firms like Chaman Lal Setia and AIA Engineering.
The ex-date is crucial for investors as it marks the day when a stock begins trading without the entitlement to the upcoming dividend, bonus shares, or buyback. Investors who wish to benefit from these corporate actions must ensure they hold the stock before the ex-date, as the company determines the beneficiaries based on the investor list at the end of the record date.
Among the stocks set to trade ex-dividend are Reliance Industries, which will offer a dividend of ₹10 per share, and South Indian Bank, offering an interim dividend of ₹0.30 per share.
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Symphony and Vidhi Specialty Food Ingredients are also on the list, offering dividends of ₹1 per share each, with their ex-dates set for August 21, 2024.
Central Depository Services (India) will be trading ex-date on August 23, 2024, for a bonus issue in the ratio of 1:1, effectively doubling the number of shares held by investors. This bonus issue is part of the company’s broader strategy to reward its shareholders while maintaining liquidity in the market.
Buybacks are also in focus this week, with Chaman Lal Setia, AIA Engineering, Symphony, and Mayur Uniquoters offering share repurchase programs. These buybacks are particularly notable given the impending tax changes that will shift the income tax liability on buybacks from companies to shareholders starting October 1.
For instance, AIA Engineering’s buyback, valued at ₹500 crore, is set at ₹5,000 per share, offering a substantial return to shareholders willing to participate.
The flurry of buybacks is largely driven by companies rushing to complete their programs before the new tax rules come into effect. The current rules impose a 20% tax on companies undertaking share buybacks, which is tax-free for shareholders. However, from October, the entire amount received by shareholders will be taxed as dividend income, potentially raising the tax burden to as much as 39% depending on individual income tax slabs.
Industry experts suggest that cash-rich companies with stable earnings, particularly in sectors like IT, pharma, FMCG, and energy utilities, are likely to continue their buyback activities in the coming months. As the taxation landscape shifts, these companies are expected to offer buybacks at a premium, making it an attractive proposition for shareholders.
Manish Chowdhury of StoxBox highlights that more companies with strong cash flows are expected to join the buyback bandwagon, especially in the IT sector, where balance sheets are robust, and stock price movements have been relatively subdued. Satish Menon of Geojit Financial Services adds that while non-retail investor participation in buybacks may decline due to the new tax rules, ongoing offers might still see a positive response driven by bullish market sentiments.
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Stocks trading ex-dividend on Tuesday, August 20, 2024:
AIA Engineering Ltd, Apar Industries Ltd, Balkrishna Industries Ltd, Century Enka Ltd, Coral India Finance & Housing Ltd, Indo Borax & Chemicals Ltd, IRB Infrastructure Developers Ltd, JK Paper Ltd, Dr. Lal Pathlabs Ltd, Leel Electricals Ltd, Mitsu Chem Plast Ltd, National Peroxide Ltd, Omnitex Industries (India) Ltd, The Phoenix Mills Ltd, PI Industries Ltd, Rain Industries Ltd, Ratnamani Metals & Tubes Ltd, Sanghvi Movers Ltd, South Indian Bank Ltd, Sun Tv Network Ltd, Titagarh Rail Systems.
Stocks trading ex-dividend on Wednesday, August 21, 2024:
Bharat Bijlee Ltd, Emami Paper Mills Ltd, Engineers India Ltd, Gateway Distriparks Ltd, Hindustan Aeronautics Ltd (HAL), India Glycols Ltd, ISGEC Heavy Engineering Ltd, ITD Cementation India Ltd, KPI Green Energy Ltd, Linc Ltd, Credo Brands Marketing Ltd, Pfizer Ltd, Rajapalayam Mills Ltd, Satia Industries Ltd, Sumedha Fiscal Services Ltd, Symphony Limited, Uniparts India Ltd, Vidhi Specialty Food Ingredients Ltd.
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Stocks trading ex-dividend on Thursday, August 22, 2024:
A-1 Acid Ltd, Aster DM Healthcare Ltd, Benares Hotels Ltd, Gretex Corporate Services Ltd, Globus Spirits Ltd, Goldiam International Ltd, Hester Biosciences Ltd, Hindware Home Innovation Ltd, Investment & Precision Castings Ltd, Indian Railway Finance Corporation (IRFC), Jindal Steel & Power Ltd (JSPL), Kakatiya Cement Sugar & Industries Ltd, L.G. Balakrishnan & Bros. Ltd, Mazda Ltd, Omax Autos Ltd, Panama Petrochem Ltd, Relaxo Footwears Ltd, Sirca Paints India Ltd.
Stocks trading ex-dividend on Friday, August 23, 2024:
ABB India Limited, A.K Capital Services Ltd, Astra Microwave Products Ltd, Bhageria Industries Ltd, Bhatia Communications & Retail (India) Ltd, Crest Ventures Limited, Crestchem Ltd, Deepak Spinners Ltd, Dynacons Systems & Solutions Ltd, Everest Kanto Cylinder Ltd, Federal Bank Ltd, Gujarat Ambuja Exports Ltd, Gandhar Oil Refinery (India) Ltd, Godfrey Phillips India Ltd, Gujarat Hotels Ltd, Insecticides (India) Ltd, Indian Railway Catering And Tourism Corporation Ltd (IRCTC), IL & FS Investment Managers Ltd, KFin Technologies Ltd, K.P. Energy Ltd, Kronox Lab Sciences Ltd, Kuantum Papers Ltd, LIC Housing Finance Ltd, Vedant Fashions Ltd, Max Healthcare Institute Ltd, Mayur Uniquoters Ltd, Meera Industries Ltd, Natco Pharma Ltd, Nicco Parks & Resorts Ltd, Oil And Natural Gas Corporation (ONGC), R.J. Shah & Co. Ltd, Rashi Peripherals Ltd, Surya Roshni Ltd, Upsurge Investment & Finance Ltd, Venky’s (India) Ltd, The Yamuna Syndicate Ltd.
Stocks declaring bonus issues next week:
PVV Infra Ltd will trade ex-bonus on August 20, with a bonus issue in the ratio of 1:1.
Sprayking Ltd will trade ex-bonus on August 21, with a bonus issue in the ratio of 1:1.
Garment Mantra Lifestyle Ltd will trade ex-bonus on August 23, with a bonus issue in the ratio of 1:1.
Stocks declaring buybacks next week:
Chaman Lal Setia Exports Ltd will declare a buyback on August 19.
AIA Engineering Ltd will declare a buyback on August 20.
Symphony Limited will declare a buyback on August 21.
Mayur Uniquoters Ltd will declare a buyback on August 23.
