Stocks to Watch: Wipro, Diamond Power, Indo US Bio-Tech Set for Ex-Date on December 3, 2024

This week is packed with exciting corporate actions for several companies, including Indo US Bio-Tech, Wipro, and others. These actions involve dividends and bonus shares, which can impact your investment decisions. 

Wipro, Diamond Power Infrastructure, Gujarat Natural Resources, Indo US Bio-Tech, and Moongipa Capital Finance will be in the spotlight as they approach their ex-date on December 3, 2024. These stocks are responding to significant corporate actions such as dividends, bonus issues, rights issues, and stock splits.

Key Dates for Wipro, Diamond Power Corporate Actions

Here’s a breakdown of the companies going ex-date this week and what it means for their shareholders December 2nd to 8th, 2024)

Wipro – Bonus Equity Issue	Indo US Bio-Tech – Interim Dividend
Corporate Action: Bonus equity issue in a 1:1 ratio. Details: Shareholders will receive 1 bonus share of ₹2 for every 1 equity share held. Additional: 1 bonus ADS will be issued for every 1 ADS held as of the record date. Record Date: December 3, 2024, fixed for eligibility, subject to member approval.	Dividend Declared: ₹0.25 per equity share of ₹10 each (fully paid-up). Financial Year: 2024-25. Record Date: December 3, 2024, to determine eligible shareholders. Payment Date: Interim dividend to be paid on or before December 19, 2024.

Diamond Power Infrastructure – Stock Split	Gujarat Natural Resources – Rights Issue
Ex-Date: Shares will trade ex-date on December 3, 2024. Stock Split Details: Equity shares will be split from a face value of ₹10 each to ₹1 each. Shareholder Impact: Holders will receive 10 equity shares of ₹1 each for every 1 equity share of ₹10 held. Record Date: December 3, 2024, set for determining eligible shareholders.	Ex-Date: Shares will trade ex-date on December 3, 2024. Rights Issue Details: Shareholders will be entitled to 3 fully paid-up equity shares of ₹10 each for every 5 fully paid-up equity shares held. Record Date: December 3, 2024, set to determine shareholder eligibility for the rights issue.

Important Points to Remember

• The dividend or bonus will be credited/issued to your Demat account after the ex-date, typically within a few weeks.
• The ex-date can affect the stock price. Often, the stock price dips slightly on the ex-date to reflect that new buyers won’t receive the dividend or bonus. This is a normal market adjustment.  
• Check with your broker or refer to company announcements for specific details.   

Let’s break down what’s happening and what it means for you.  

Understanding Ex-Date

Before we delve into the details, it’s crucial to understand the term “ex-date.” In the stock market, the ex-date refers to the first day a stock trades without entitlement to a specific corporate action. These actions include dividends, bonus shares, rights issues, stock splits, or buybacks.  

To be eligible for these benefits, you must be a shareholder on the record date, typically set a few days before the ex-date. Companies use the record date to determine the list of shareholders entitled to receive the benefits.

Understanding Dividends and Bonus Shares

Now, let’s explore the two main types of corporate actions happening this week: dividends and bonus shares.

• Dividends: A dividend is a payout of a company’s profits to its shareholders. It’s a way for companies to share their success with investors. The company’s board of directors determines the dividend per share. In this case, Indo US Bio-Tech is offering an interim dividend of ₹0.25 per share.
• Bonus Shares: A bonus issue is when a company issues additional shares to its existing shareholders for free.  This increases the total number of shares outstanding without affecting the company’s overall value. In simpler terms, if you hold 100 company shares before the bonus issue, you might receive an additional 20 (depending on the bonus ratio) after the ex-date. This week, Wipro (ex-date yet to be announced) has declared a bonus issue in the ratio of 1:1, meaning shareholders will receive one bonus share for every share they hold.
• Stock Split: While not happening this week, for companies undergoing a stock split (like Diamond Power Infrastructure), the ex-date marks the day the stock starts trading with the new face value. However, the total value of your holdings remains the same.

What Does This Mean for You?

If you’re holding Indo US Bio-Tech or Wipro shares before December 3rd, you’ll be eligible for the respective benefits. This can be seen as a positive for investors, as it represents a return on their investment (dividend) or an increase in their shareholding (bonus).

However, suppose you’re considering buying shares in these companies specifically for the dividend or bonus. In that case, it’s important to remember that you won’t be eligible if you purchase them on or after December 3rd. You might be better off looking at other investment opportunities.

Beyond This Week

Ex-dates are a regular occurrence in the stock market. Companies use dividends and bonus shares as ways to reward their shareholders. Staying informed about upcoming ex-dates can help you make informed investment decisions.  

Here are some tips for keeping track of ex-dates:

• Many online financial websites and brokerage platforms provide calendars highlighting upcoming ex-dates.  
• You can also sign up for email alerts from your brokerage firm to receive notifications about ex-dates for your stocks.
• It’s a good practice to regularly review company announcements and financial reports to stay updated on upcoming corporate actions.

By understanding ex-dates and how they affect your investments, you can be better prepared to navigate the stock market and potentially maximize your returns.

Things to Consider Before Investing for Dividends and Bonus Shares

While dividends and bonus shares can be attractive, here are some things to keep in mind:

• Company Performance: A company’s ability to pay dividends depends on its financial health. Look for companies with a history of paying dividends and consistent profitability.
• Tax Implications: Dividends and bonus shares might have tax implications. Research the tax treatment before investing.
• Overall Investment Strategy: Don’t chase dividends or bonus shares alone. Consider these benefits as part of your overall investment strategy and focus on the company’s long-term prospects.

Conclusion

Dividends and bonus shares can be great ways for companies to reward their loyal investors. By understanding these concepts and the expiration date, you can make informed investment decisions and potentially benefit from these additional rewards. Remember, always conduct your research and choose companies that align with your financial goals before investing.

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