If I buy shares for buyback declared shares before ex date,it will be eligible for buyback on record of company.If I sell after record date or after some days and buy again same or less than recorded nos before tender date (buyback bidding).Shall I be eligible for buyback participation or not?
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Yes, you’ll be eligible to tender your shares in the buyback if you sell after the record date and buy them back again later.
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Never knew this. Thank you for the question and for the reply. I always thought that if I retain my holding till the record date, I am eligible and after that date if I sell, I thought I will no longer be eligible. Never thought I could buy again in the interim and still be eligible for tendering.
Another learning lesson for me was Infosys buy back - This I am told was a open market buyback where the company will buy shares from the open market whilst for TCS it was tender buy back where existing shareholders could tender at a predetermined price fixed by the company.
If we buy on ex date for buyback purpose , will it be eligible or we have to buy one day before Ex-date?
You have to buy before the ex-date to be eligible.
The “ex” in “ex-date” means “without”. So the ex-date is the first date on which the share trades without the ability to participate in the buyback.
This works also for other ex-dates, e.g: dividend, bonus, split, etc. Whenever you see “ex-date”, read it as “without-date” and there will be no confusion.
To be eligible for corporate action, you need to buy the shares before the ex-date. If you buy on ex-date, you won’t be eligible, as shares trade without corporate action benefit from ex-date onwards.
Nicely explained about ex date. Next time onwards will use it as “without” - Avoids all confusion
One other point please.
I always thought that when I do buy before the “without date”, I should also ensure that the shares are credited to my demat account before the 'without date".
If I buy just one day before the “without date” the shares will be credited only after two days and hence not eligible.
Please clarify this.
No, you only need ensure that you buy before the ex-date.
There is another date on which the shares should be updated in the company’s records as belonging to you, for you to be a beneficiary of the corporate action (such as dividend, split, bonus, …). This date is called the record date for the corporate action. The company fixes and announces the record date for an action, and then the exchanges decide on an ex-date which is some days before the record date. This gap between the ex-date (which comes first) and the record date is so that there is enough time to update the company’s records. So if you buy before the ex-date, there is enough time for the processing (including the +2 working days for transferring to your demat account) to happen so that the shares are in your name on the record date.
In short: if you buy before the ex-date, then you will be part of the corporate action.
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