Dividends, Stock Splits, Bonus Shares & Buybacks
A complete breakdown of Indian corporate actions. Learn how record dates and ex-dates work, the difference between bonus shares and stock splits, and tax rules.
A corporate action is an official event initiated by a publicly listed company's Board of Directors that impacts its shareholders, capital structure, or financial standing.
On platforms like UpMyFolio, thousands of investors monitor upcoming corporate actions daily to track dividend income, stock split adjustments, and capital reorganization notices.
To participate in any corporate action in India, you must understand the key dates:
[ Board Announcement ] ──> [ Ex-Date (T) ] ──> [ Record Date (T) ] ──> [ Payout / Credit ]
Both stock splits and bonus shares increase the total number of shares you own while proportionally decreasing the stock price. However, their accounting mechanics differ:
| Dimension | Stock Split | Bonus Issue |
|---|---|---|
| What Changes? | Face Value of the share is reduced (e.g., ₹10 to ₹2) | Face Value remains identical |
| Accounting Source | Pure division of existing share capital | Funded by capitalizing Free Reserves & Surplus |
| Purpose | Increase trading liquidity for retail participants | Signal management confidence in reserves |
| Impact on Value | Total investment value remains identical | Total investment value remains identical |
Example: If you hold 100 shares of a company trading at ₹1,000 (Face Value ₹10):
When an Indian company generates surplus Free Cash Flow beyond its reinvestment needs, it can return capital through two avenues:
Direct cash payments credited to shareholders' linked bank accounts. Under the Finance Act 2020, dividend income is added to your taxable income and taxed at your applicable personal income tax slab rate.
The company repurchases its own shares from the open market or via a tender offer, extinguishing the shares and reducing the share count.
UpMyFolio syncs directly with official NSE feeds daily:
/company/RELIANCE) to inspect the Events & Corporate Actions card./feed) to track all upcoming dividend record dates and board meeting intimations across the entire market in real time.