No, you are wrong. The dividend per share that you will get is 1025-1030 per year adjusted for reduction of shares due to buyback. And due to the taxation on dividend it will not make sense to buy at CMP for most investors except those who pay very little tax on dividend income.
Disclosure - invested for myself and clients from much lower price as a special situation opportunity.
What are the risks in this special situation, apart from the dividend getting delayed by a few months? Any thoughts?
Another question is how fast will the stock go down after the ex-dividend date. Will it be really slowly through 5% circuits?
Seems like an interesting opportunity for small investors!
is there a circuit filter for a stock going ex dividend ? I thought that wasnt the case
I donât think circuit filter should apply. Exchange should adjust the stock price considering the dividend outgo.
Does anyone know where to get the rules on post dividend price . Is pricing auto adjusted for dividend amount or is it demand supply
Both actually. The demand and supply of efficient market will auto adjust the cum-dividend price to the ex-dividend price on the ex-date to the extent of dividend approx
" How much majesco stock prices can go in secondary market " ?
Possible scenarios -
I am not expert and doesnât have much knowledge on this topic but i am very keen to know
If i buy today @920 i know i will get dividend @1025+ and rs 25 more so for a small investment its a gain of 150 rs excluding stcg, adjusting for stcg @15% rs 125 gain on 920 - 13.50% in a time of 6 months!
What will happen will traders go for a short term investment and with buying will prices in secondary market cross 1000+ mark bcos every penny matters!
HI Divyanshu
Few pointers we need to keep in mind. Since Dividend is taxable at the highest rate applicable to individual factor that in your return. As 1000+ dividend may not be that great post tax.
Also if you see average price of Majesco for last 5 year is in range of 300-400 so there can be market inefficiencies. It implies chance may be it doesnât go down immediately to residual value. But very difficult to be certain about such cases.
All in all its difficult to make great money at this price point. I have taken a position with all the above and looks to make decent return in next 6 months, rest all time will tell.
All the best.
One thing I donât understand is why entities that are not taxed (like mutual funds) are not lapping up shares with both hands. An almost guaranteed return of around 12-14% in 2-3 months should be really attractive?
Or maybe they ARE buying, but are a little price sensitive, since the upside is kind of capped, but the downside is steep (in case something unexpectedly goes really wrong).
If I may be wrong, customers of mutual fund have to pay income tax. So what gain
does clients have in paying tax at 30% even if mutual fund do not pay.
Thatâs not how it works. Customers pay tax only when they redeem the fund, and usually itâs at 10% on the gains (if any).
I think the customer has to pay STCG/LTCG (15%/10%) depending in his/her case. Also investor of mutual fund has to pay dividend tax according to his marginal.
It will happen. Arbitrage funds and others will act soon. Possibly once buy back is closed . If an mf buys at 920 and holds to dividend ., it can make 100 rs. tax will be at 15 percent as stcg on that
I donât think there will be ANY tax for mutual funds. They are pass-through, non-taxed entities.
yes⌠I meant eventually in the hands of the unit holder.
Report on majesco
The offer letter received from RTA today shows entitlement shares as 100% for retail holdings.
Is something amiss here?
As per my calculation based on 30th Sep holding this would have been around 20%.
Or have all retail shareholders of < Rs. 2 lakh have sold except probly me⌠
Check total number of shares and shares entitlement for buy-back.
Yes, its the same number - hence I said 100% ratio coming.
