- What is ASBA?
- How do I apply for a Buyback?
- How do I participate in an OpenMarket Buyback? How is it differentfrom normal buyback?
- How do I apply for an OFS?
- Why have I received lesser dividendthan I should have?
- What is a Rights Issue?
- What is a stock split?
- What are dividends?
- What is a bonus issue?
- What does ex-date and record date mean?
Application Supported by Blocked Amount (ABSA) is a process developed by the SEBI for applying to IPO. In ASBA, an IPO applicant’s account does not get debited until shares are allotted to them.
To apply for Buyback, please go IPO Online. Here you will be able to see all the Buybacks that are available and can place orders there.
There are two ways in which company can buy back shares from their public shareholders:
- Buyback Tender Offer: The company makes an offer to buy back its shareholders (Offer price) at which the shareholders can tender their shares. If you are eligible for the buyback, you can apply for the same from here.
- Open-market buyback: The company can opt to buy back its shares by actively buying from sellers on the exchange platform. The company mentions the period of buyback in the buyback offer. These buybacks usually last for months as the company has to ensure that there isn't significant price appreciation due to its buying activity.
You can find these details here on the SEBI website along with the list of all upcoming open market buybacks.
To apply for OFS, please call us at 0141-3522718 or email us at email@example.com. Our team will take you to the process for applying OFS with Navjeevan.
The dividend amount is reduced by the applicable TDS rate before crediting it to your account. The dividend on equity shares is subjected to TDS at a rate of 10% if the dividend amount exceeds Rs. 5000.
A rights issue is an invitation to existing shareholders to purchase additional new shares in the company. This type of issue gives existing shareholders securities called rights. With the rights, the shareholder can purchase new shares at a discount to the market price on a stated future date. The company is giving shareholders a chance to increase their exposure to the stock at a discount price.
A stock split is a decision by a company's board of directors to increase the number of shares that are outstanding by issuing more shares to current shareholders.
For example, in a 2-for-1 stock split, an additional share is given for each share held by a shareholder. So, if a company had 10 million shares outstanding before the split, it will have 20 million shares outstanding after a 2-for-1 split.
A stock's price is also affected by a stock split. After a split, the stock price will be reduced (since the number of shares outstanding has increased). In the example of a 2-for-1 split, the share price will be halved. Thus, although the number of outstanding shares increases and the price of each share changes, the company's market capitalization remains unchanged.
A dividend is the distribution of some of a company's earnings to a class of its shareholders, as determined by the company's board of directors. Common shareholders of dividend-paying companies are typically eligible if they own the stock before the ex-dividend date.1 Dividends may be paid out as cash or in the form of additional stock.
A bonus issue, also known as a scrip issue or a capitalization issue, is an offer of free additional shares to existing shareholders. A company may decide to distribute further shares as an alternative to increasing the dividend pay out. For example, a company may give one bonus share for every five shares held.
Companies announce benefits or changes for their shareholders as on a given date in the form of corporate actions. These benefits or changes can be in form of entitlement of rights shares, bonus shares, stock splits, dividends, etc.
You are considered an eligible shareholder in the records of the company if you hold the shares on the given date which is also known as the record date.
In India, shares are delivered to your demat account 2 trading days after you purchase them. A stock is said to trade with the benefits of the corporate action or cum-benefit (i.e., cum-rights, cum-dividend, etc) up to 2 trading days before the record date after which it trades without the benefit or ex-benefit. The date a stock starts trading ex-benefit is known as the ex-date.
For example, the record date for a corporate action is on a Wednesday. You will be able to purchase the stocks till Monday to avail the benefit of the corporate action. If you purchase the stock on Tuesday or later, the stock will not be delivered into your demat account by Wednesday and although you have purchased the stock, you will not be entitled to the corporate action.