What the two dates mean

When a company declares a dividend (or a bonus, split or rights issue), it has to decide who gets it. Shares change hands all day, so it picks a date and says: whoever is on our register of shareholders at the end of that day is entitled. That’s the record date.

The ex-date (“ex” as in without) is the first trading day on which a buyer does not get the dividend. Buy before the ex-date and the dividend is yours; buy on or after it and it goes to the seller.

The two dates are linked by settlement. To be on the register at the end of the record date, your purchase must have settled by then. With India’s T+1 cycle, a trade settles one working day later, so the last day to buy is the working day before the record date — and the record date itself becomes the ex-date. NSE’s corporate-actions listing for Britannia shows exactly that: the ex-date and record date fall on the same day for each of its recent dividends (NSE corporate actions). Under the old T+2 cycle they were a day apart: Britannia’s ₹83 interim dividend in 2020 went ex on 26 August 2020, with a record date of 27 August 2020.

Record date Ex-date
Who sets it The company Follows from the record date and the settlement cycle
What it decides Whose name must be on the register to get the dividend The first day a buyer no longer gets it
Under T+1 (now) The record date The same day as the record date
Under T+2 (before) The record date One working day before the record date
Last day to buy and still get it The working day before the record date (T+1) The working day before the ex-date
What you’d notice Nothing on screen; it’s a register check In theory, the price adjusts down by about the dividend

The rule

Last day to buy and receive the dividend  =  record date − 1 working day   (T+1)
Ex-date                                   =  record date                   (T+1)

Price adjustment on the ex-date (in theory):
Ex-dividend price  ≈  Previous close − Dividend per share

Why should the price drop? Because the cash is leaving the company. The evening before the ex-date, a share is a claim on the business plus the dividend about to be paid. The next morning it’s a claim on the business alone. Nothing about the business changed; the dividend just moved from the company’s bank account to yours. Your wealth is the same, split between the share and the cash (before tax — the dividend is generally taxable in your hands).

Worked example: Britannia’s final dividend for FY 2024-25

Britannia’s board recommended a final dividend of ₹75 a share on 8 May 2025 and fixed Monday 4 August 2025 as the record date, ahead of the AGM (annual general meeting) on 11 August 2025 (Britannia’s intimation to the exchanges). Prices are NSE closes and opens from Yahoo Finance; for illustration only.

 
Last day to buy with the dividend (“cum-dividend”) Fri 1 Aug 2025
Close that day ₹5,798
Ex-date (= record date) Mon 4 Aug 2025
Dividend per share ₹75 (1.29% of the price)
“Expected” ex-dividend price (close − dividend) ₹5,723
Actual open on the ex-date ₹5,752.5 (−0.78%)
Actual close on the ex-date ₹5,787 (−0.19%)
Close + dividend, vs previous close +1.1%
Nifty 50 (price index) that day +0.64%

Step by step:

  1. Anyone holding at the close on 1 August — including a buyer that day, whose trade settled on the record date — got ₹75 a share, paid by 9 September 2025.
  2. The share opened ₹45.5 lower on the ex-date and closed ₹11 lower. Both are smaller than the ₹75 dividend.
  3. Add the dividend back and a holder was 1.1% better off by the close — on a day the Nifty rose 0.64%.

The year before, the market was falling instead. Britannia’s ₹73.50 final dividend for FY 2023-24 went ex on 5 August 2024 (105th AGM notice), a day the Nifty fell 2.68%. Britannia closed 0.39% lower, and with the dividend added back a holder was up 0.89%.

So did the price “not drop enough”? Two days can’t tell you. The dividend was about 1.29% of the price; Britannia’s ordinary daily move in FY26 had a standard deviation of 1.26%. The ex-dividend adjustment is the same size as one day’s noise, so on any single ex-date you see the adjustment plus whatever else the market did. The mechanics are certain; reading them off one day’s chart isn’t.

🧒 Explain it like I'm 10 (optional — skip if this is already clear)

A piggy bank with ₹100 inside is worth ₹100 plus the piggy. If the bank’s owner shakes out ₹5 for himself on Sunday, then on Monday the piggy bank is worth ₹5 less. Nobody lost anything: the ₹5 is in his pocket now.

The record date is the day the teacher writes down who owns the piggy bank. The ex-date is the first day someone who buys it doesn’t get the ₹5.

Common mistakes

  • Buying just before the ex-date to “capture” the dividend. The price adjusts for it, so you’re swapping share value for cash, and the dividend is generally taxed as income. There is no free lunch in the mechanics, whatever a single day’s chart seems to show.
  • Buying on the record date. Under T+1 your trade settles the next day, after the register is struck. The last day to buy is the working day before.
  • Reading the ex-date drop as bad news. A long-term chart that isn’t adjusted for dividends shows a small step down every year. It’s cash leaving the company, not the market losing faith in it. The same goes, on a bigger scale, for bonuses and splits (see the face-value post).
  • Confusing the record date with the payment date. Entitlement is fixed on the record date; the cash arrives weeks later (for Britannia’s FY25 final, by 9 September 2025). The dividend yield post counts dividends by when they go ex.

Takeaway: the record date decides who gets a dividend, and under T+1 it is also the ex-date: buy by the working day before, or the dividend goes to the seller. The share price adjusts down by roughly the dividend that morning, because the cash has left the company — nobody gets it for free.