{"id":2194,"date":"2020-12-17T16:34:46","date_gmt":"2020-12-17T11:04:46","guid":{"rendered":"https:\/\/blog.tickertape.in\/?p=2194"},"modified":"2022-09-21T16:26:52","modified_gmt":"2022-09-21T10:56:52","slug":"read-this-before-investing-in-majesco-ltd-for-its-dividends","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/read-this-before-investing-in-majesco-ltd-for-its-dividends\/","title":{"rendered":"Majesco Limited Dividends: About, Sources of Dividends and Important Dates"},"content":{"rendered":"\n<p>At ~19,480%, Majesco Ltd\u2019s interim <a href=\"https:\/\/www.tickertape.in\/blog\/cash-dividend-vs-stock-dividend\/\">dividend<\/a> may have enticed you to add the stock to your investment portfolio. After all, it is the highest dividend payout ever declared by an Indian firm. While it would be a delightful sight to see a hefty dividend deposited in your bank balance, it makes sense to know the consequences as well.<\/p>\n\n\n\n<p>In this article, we discuss how dividends affect stock prices, information that would help you make better investment decisions if you are not an existing shareholder of Majesco but are looking to buy the stock for its handsome dividends. In other words, you are resorting to dividend stripping.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/read-this-before-investing-in-majesco-ltd-for-its-dividends\/#About-Majesco-Ltd\" title=\"About Majesco Ltd\">About Majesco Ltd<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/read-this-before-investing-in-majesco-ltd-for-its-dividends\/#The-source-of-Majesco-Ltds-dividends\" title=\"The source of Majesco Ltd\u2019s dividends\">The source of Majesco Ltd\u2019s dividends<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/read-this-before-investing-in-majesco-ltd-for-its-dividends\/#Relevant-dates-of-dividend-declaration\" title=\"Relevant dates of dividend declaration\">Relevant dates of dividend declaration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/read-this-before-investing-in-majesco-ltd-for-its-dividends\/#Should-you-buy-Majesco-for-its-attractive-dividends\" title=\"Should you buy Majesco for its attractive dividends?\">Should you buy Majesco for its attractive dividends?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/read-this-before-investing-in-majesco-ltd-for-its-dividends\/#You-attract-tax-on-dividend\" title=\"You attract tax on dividend\">You attract tax on dividend<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/blog\/read-this-before-investing-in-majesco-ltd-for-its-dividends\/#Majescos-stock-prices-could-be-impacted-by-dividends\" title=\"Majesco\u2019s stock prices could be impacted by dividends\">Majesco\u2019s stock prices could be impacted by dividends<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/blog\/read-this-before-investing-in-majesco-ltd-for-its-dividends\/#Announcement-date\" title=\"Announcement date\">Announcement date<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/blog\/read-this-before-investing-in-majesco-ltd-for-its-dividends\/#Impact-of-announcement-date-on-dividends\" title=\"Impact of announcement date on dividends\">Impact of announcement date on dividends<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tickertape.in\/blog\/read-this-before-investing-in-majesco-ltd-for-its-dividends\/#Record-date\" title=\"Record date\">Record date<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.tickertape.in\/blog\/read-this-before-investing-in-majesco-ltd-for-its-dividends\/#Impact-of-record-date-on-dividends-and-stock-price\" title=\"Impact of record date on dividends and stock price\">Impact of record date on dividends and stock price<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.tickertape.in\/blog\/read-this-before-investing-in-majesco-ltd-for-its-dividends\/#Ex-dividend-date\" title=\"Ex-dividend date\">Ex-dividend date<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.tickertape.in\/blog\/read-this-before-investing-in-majesco-ltd-for-its-dividends\/#Impact-of-the-ex-dividend-date-on-dividends-and-stock-price\" title=\"Impact of the ex-dividend date on dividends and stock price\">Impact of the ex-dividend date on dividends and stock price<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.tickertape.in\/blog\/read-this-before-investing-in-majesco-ltd-for-its-dividends\/#Payment-date\" title=\"Payment date\">Payment date<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.tickertape.in\/blog\/read-this-before-investing-in-majesco-ltd-for-its-dividends\/#Impact-of-payment-date-on-dividends-and-stock-price\" title=\"Impact of payment date on dividends and stock price\">Impact of payment date on dividends and stock price<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\" id=\"About\"><span class=\"ez-toc-section\" id=\"About-Majesco-Ltd\"><\/span><strong>About Majesco Ltd<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Majesco Ltd is a software exporter. The company started out as an American subsidiary of Mumbai-based software provider Mastek in 2014. But it was spun off as a separate entity later.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Source\"><span class=\"ez-toc-section\" id=\"The-source-of-Majesco-Ltds-dividends\"><\/span><strong>The source of Majesco Ltd\u2019s dividends<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Earlier this year, Majesco Ltd sold its US arm to private <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-equity\/\">equity<\/a> firm Thoma Bravo for $594 mn. These proceeds account for the bulk of its revenues and profits, which the company is distributing as dividends. At the rate declared, each Rs 5 share would get a dividend of Rs 974.<\/p>\n\n\n\n<p>But wait. Why did the company declare dividends when it could plough back the profits to expand its business? That\u2019s a good question to ask before betting on Majesco Ltd.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Dates\"><span class=\"ez-toc-section\" id=\"Relevant-dates-of-dividend-declaration\"><\/span><strong>Relevant dates of dividend declaration<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Record date: 25<sup>th<\/sup> Dec 2020<\/li><li>Ex-dividend date: 23<sup>rd<\/sup> Dec 2020<\/li><li>Likely earliest dividend payment date: 30<sup>th<\/sup> Dec 2020<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Buy\"><span class=\"ez-toc-section\" id=\"Should-you-buy-Majesco-for-its-attractive-dividends\"><\/span><strong>Should you buy Majesco for its attractive dividends?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Here are a few details you should know before buying Majesco Ltd to earn hefty dividends.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"You-attract-tax-on-dividend\"><\/span><strong>You attract tax on dividend<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Dividend earned from a domestic company was exempt until 31<sup>st<\/sup> Mar 2020. However, starting Apr, dividends received are taxable in the hands of the receiver as per the applicable tax rate. So if you are an HNI, you would have a massive tax to forgo considering the applicable surcharge too. Moreover, dividend income also attracts <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-tds-and-how-to-file-it\/\">TDS<\/a>. So, if you are looking to <a href=\"https:\/\/www.tickertape.in\/blog\/why-should-you-prioritise-investing\/\">invest<\/a> in Majesco for dividends, you might as well be ready to pay taxes.<\/p>\n\n\n\n<p>But as an existing shareholder looking to sell the stock, you would attract a long-term capital gains tax of 10% or a short-term capital gains tax of 15%. So if you are gripped by the dilemma of whether to stay invested in Majesco to benefit from its massive dividends or exit now and book profits, it is better to take a call after doing a cost-benefit analysis. That is, after ascertaining your probable tax liability in two cases.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Majescos-stock-prices-could-be-impacted-by-dividends\"><\/span><strong>Majesco\u2019s stock prices could be impacted by dividends<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Before buying Majesco Ltd or any dividend stock for that matter, it is best to understand how dividends impact the stock price. Here are some dividend dates you should be familiar with in order to make better-investing strategies.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Announcement-date\"><\/span><strong>Announcement date<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The announcement date or the dividend declaration date is the date on which a company\u2019s board of directors announces the next scheduled dividend.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Impact-of-announcement-date-on-dividends\"><\/span><strong>Impact of announcement date on dividends<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p><a href=\"https:\/\/www.tickertape.in\/blog\/corporate-actions\/\">Corporate actions<\/a> impact stock prices. Likewise, any change in the dividend amount to be distributed as declared on the announcement date can cause <a href=\"https:\/\/www.tickertape.in\/blog\/volatility\/\">volatility<\/a> in the stock price. For instance, if for a year, a company declares a lower dividend or nothing compared to the previous years, investors may perceive that it is in financial turmoil. As a result, they may liquidate their investments in the stock as a defence mechanism. This sends the price tumbling down. Conversely, declaration of a higher or equivalent dividend would make investors want to buy the stock, thereby boosting its price.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Record-date\"><\/span><strong>Record date<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>This is the cut-off date set by the company to ascertain the <a href=\"https:\/\/www.tickertape.in\/blog\/shareholders\/\">shareholders<\/a> that are eligible to receive the dividend. Ergo, if you are not a shareholder of the company as of this date, you are not eligible to receive the dividend.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Impact-of-record-date-on-dividends-and-stock-price\"><\/span>Impact of record date on dividends and stock price<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The record date doesn\u2019t have an impact on dividends or stock price.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Ex-dividend-date\"><\/span><strong>Ex-dividend date<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Generally, the ex-dividend date falls on two business days prior to the record date. You will only receive the next dividend declared by a company if you buy a stock before the ex-dividend date. That is, if you buy a stock after the ex-dividend date, you won\u2019t receive the dividend.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Impact-of-the-ex-dividend-date-on-dividends-and-stock-price\"><\/span>Impact of the ex-dividend <em>date on dividends and stock price<\/em><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Considering an attractive dividend payment, you may be willing to buy the stock even at a premium before the ex-dividend date so that you become eligible to receive it. This boosts the stock price, which may rally up till the ex-dividend date. Before this date, the stock price is cum-dividend. Meaning, the stock price reflects the reserve earmarked for the dividend. However, the price would fall on the ex-dividend date since the company\u2019s reserves would be reduced by the amount of dividend declared.<\/p>\n\n\n\n<p>So if Majesco\u2019s cum-dividend stock price is Rs 600 and dividend per share is Rs 500, on the ex-dividend date, the stock price would fall to Rs 100. While this results in a capital loss, Section 94(7) of the <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-income-tax\/\">income tax<\/a> rules prohibit you from claiming the benefit. As per the section, a capital loss incurred on selling stocks that you bought within 3 months before the record date and sold them within 3 months after the record date, are not allowed to be set off to the extent of dividend received.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Payment-date\"><\/span><strong>Payment date<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>This the date on which the company distributes the dividend to shareholders.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Impact-of-payment-date-on-dividends-and-stock-price\"><\/span>Impact of payment date on dividends and stock price<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Just like the record date, the payment date doesn\u2019t impact dividends or stock price.<\/p>\n\n\n\n<p>Now that you have all the details you need to make an informed investment decision, think over and do what\u2019s best for you.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Planning on investing in Majesco Ltd dividends? Click here to know about Majesco dividends including information about the company, its dividends, relevant dates &#038; more.<\/p>\n","protected":false},"author":27,"featured_media":2196,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"no","_lmt_disable":"no","footnotes":""},"categories":[1749,1721],"tags":[186,188,187],"acf":[],"modified_by":"Aradhana Gotur","jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2020\/12\/Majesco.png?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/2194"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=2194"}],"version-history":[{"count":4,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/2194\/revisions"}],"predecessor-version":[{"id":10300,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/2194\/revisions\/10300"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/2196"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=2194"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=2194"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=2194"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}