NSE Quotes – Record Date/ Book Closure Date/Ex Date/BC Start Date/BC End Date

Corporate Information section of NSE website gives different dates related to corporate benefits like bonus, dividend and the announcements like face splits. All these dates are to find out eligible investors for the corporate benefits and smooth passage of these benefits to them.

Book Closure Dates: Transfer of shares is a continuous process. Shares change hands at a rapid pace every day. So it may not be possible for the companies to find out eligible investors for the corporate benefits. So they fix a date and announce that the investors who are in their records on that date would be eligible for the benefits. They close the share transfer books for a period for this purpose. This period is called Book Closure period. During this period companies after identifying the eligible investors, pass the benefits to depositories which in turn to investors. In NSE website this period is given as BC Start Date and BC End Date.

Record Date: A day before Book Closure period is Record Date. Only the investors who are in the share transfer books of a company on the end of the day on Record Date is eligible for the corporate benefits.

Ex-Date: It is the date on which the corporate benefit is reflected in the share price. The investors who hold the securities just before this day are eligible for corporate benefits. The people who buy shares on or after this date are not eligible for the benefits.

Record date and Ex-Date both sound similar? There is a difference. If we buy a security today the share will get delivered to your account after T+2 days. Usually there is a difference of 1 or 2 trading days between Record date and Ex-date. If you buy a security 1 day before Ex-date the share will be on your name in the books of share holders of the company before the record date and you will be eligible for the benefits. Buyers who buy the shares on or after the Ex-Date are not eligible for the same.

I will try to make it simple with an example. Let’s say Reliance Power announced Bonus issue of shares. Book Closure dates are from 2008 July 23^rd to 25^th. Ex date is 21st July and record date is 22nd July. That is if you buy Reliance Power shares before 21^st July your name will be there in the share holders books of the company and you will get bonus shares. Usually it takes 7 – 8 days for the bonus shares to get credited to your account. The person who buys Rel Power shares on or after 21st July is not eligible for the bonus issue because company considers the entries in share holders books end of the day on Record Date. Company will close its books from July 23^rd to 25^th

On Ex-Date the price of the Rel Power is Ex-Bonus i.e. if the price of the share is Rs500 on 20th July it would be around Rs260 (consider 1:1 bonus. Because of the lower price liquidity increases and hence the price will move little more than Rs 250) on July 21^st.

If you have 1000 shares on July 20^th you can sell them on that day for Rs500 per share. On July 21^st the price would be Rs260 and you will have only 1000 shares. The remaining 1000 shares will get added to your account after 7-8 days.

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July 15, 2008 | Filed Under Stocks

Comments

4 Responses to “NSE Quotes – Record Date/ Book Closure Date/Ex Date/BC Start Date/BC End Date”

sheraz on August 23rd, 2008 6:47 am

if i sell my share on record. will i get the bonus share?
kaveri on September 10th, 2008 6:39 am

No,you will not get
Babu on October 19th, 2008 3:54 am

What is the difference between bonds and debentures?
Satyam on October 19th, 2008 10:20 am

Almost similar except the collateral part i.e. debentures are less secure as they are not backed by any assets. Moreover, in case of bankruptcy bonds get more precedence in repayment over debentures.

From Companies’ perspective; They issue bonds as the interest rate is less on bonds. But need to show some assets as security. They issue debentures (even though the rate of interest is high) over bonds at a certain point as they don’t want to put all their assets against the loans.