Understanding the Delay in ITC Dividend Payment

On 8th May 2020, I purchased ITC shares, only to hear of their dividend announcement on 26th June, which was a promising 10.15 per share. However, the same dividend has not yet been credited to my bank account. This article aims to clarify this situation and provide insights into the dividend distribution process for ITC.

What is the Current Status of ITC Shares?

ITC, a leading company in India, is currently trading at around ?195.85. For the year ending March 2020, ITC declared an equity dividend of 1015.00, resulting in a dividend of ?10.15 per share. According to the company, dividend payments will be made to shareholders who had ITC shares in their demat accounts as of the ex-dividend date, which was 6th July 2020.

What is an Ex-Dividend Date?

The ex-dividend date, often abbreviated as X-date, is the cut-off date on which a shareholder must own the shares to qualify for the dividend payout. In this case, the ex-dividend date was 6th July 2020. This date is crucial because it determines which shareholders are eligible to receive the dividend. Shareholders who bought the shares after this date would not be eligible.

Why Haven't I Received the Dividend Yet?

Several factors can explain the delay in dividend payment. Firstly, the company must hold its Annual General Meeting (AGM) to declare the dividend. The AGM for ITC was scheduled for 4th September 2020. If the shareholders approve the dividend, then the company will proceed with the payment. If the dividend is approved by the shareholders, it will be paid on 8th September 2020 to eligible shareholders.

Key Details from the AGM Announcement

According to the company's announcement for the 109th AGM, the dividend will be paid to eligible shareholders after its approval. The company notified that the share register would be closed from 8th to 9th July 2020, to ensure a list of shareholders who should receive the dividend.

What Happens Now?

Shareholders who held ITC shares until the ex-dividend date (6th July 2020) should receive the dividend within a short period. The company has assured that once the AGM approves the dividend, it will be credited to the shareholders' bank accounts. It's important to keep an eye on the bank statements or check with your bank for the dividend payment.

Current Market Trends for ITC

As of the time of writing, ITC shares are trading at 195.85. The company has performed well over the past year, with a dividend of ?10.15 per share. Investors looking for stable and reliable dividend-paying stocks should consider ITC, as it has a proven track record of consistent dividend payments.

Conclusion

The delay in receiving the dividend is understandable, given the steps involved in the declaration and payment process. ITC has made it clear that the dividend will be credited once the AGM approves it. It is advisable for shareholders to stay updated with the company's announcements and check the payment timelines provided by the company.