Thanks for explaining this. I didnt knew this point on adjusted share price after dividend is payed out.
I thought i could buy the Majesco shares for 974. get a dividend of 974 and then sell the share at 974. so making a 100% gain in a month 
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Based on tax implications, some can benefit on:
- Tax loss harvesting (by holding for 3 months+)
- Cheap option in the form of ex-dividend share but with limited upside
- Transfer of profits across line items for few firms/companies
Buying now makes sense for retired folks with no income. In fact, they can accumulate capital losses as well by holding the share for 3 months after ex-dividend date. The 3 month waiting period under section 94 (7) is apparently no more applicable now since dividend income is no more exempt - please check.
For people/entities without tax implication:
In effect, one will get a free option(paying through tax if applicable) with intrinsic value of 30-60 Rs.
This is by buying the share at 963 Rs.(current price) and getting back dividend of 974 Rs.
Putting liquidity behind this will be the challenge for some.
Who can benefit by harvesting short term capital losses due to dividend stripping:
- Retired people / People with no income (Can buy upto 5L?)
(Avoid 7.5% TDS by submitting Form 15G/ Form 15H.at Tax Exemption Forms Registration
Form status after submission: Tax Exemption Registration
Else can be claimed later as IT refund) - Mutual funds
- Insurance companies
- PMS
- Loss making companies (Slightly complicated basis which line items can be netted off as per tax laws, but huge opportunity for some)
Who will have to sell due to dividend implications:
- All Investors with tax slab > 5%
- FIIs
- FPIs
- Profitable companies
Promoters who are holding shares since inception will be little impacted.
Shareholding as of Sept 2020:
Basis above, about 30-40% of the shares may change hands before 23rd Dec
Views?
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Not that easy as 7.5% TDS deduction for dividend payout above 5K…
I have a question on whether the company can do any business going forward i.e is there any binding agreement for the promoters not to do business.
How to arrive at the fair value now
@8sarveshg Can you please explain the ongoing buying in Majesco? Everyday it’s hitting the upper circuit. Why are people still buying it? Does the current price not reflect the true value of the stock? Are people expecting further dividend or higher exit price? It’s confusing since they don’t really have any earnings going forward. What’s the exit situation here.Thanks.
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They have 1lac sql ft building in Navi MUmbai (value ~ 125-150 Cr). They still have unpaid cash of 100 crore …so at 2.75 crores of outstanding shares, it still has ~100 / share value left
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They just copied the content of my original post on majesco here on their blog.
Majesco update
The existing promoters have sold their entire 14.8% stake to Aurum Platz, a real estate company. This has triggered a mandatory open offer for additional 26% stake. The price offered is Rs 77. With a new promoter, the dynamics have changed completely. Detailed public statement will be published within next 4 days.
Majesco-Open offer-22Mar21.pdf (1.6 MB)
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Farid Kazami to ET Now:
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Any reason of cmp not reflecting open offer price ? Stock is in upper or lower circuit and it sounds like something fishy or operated ?
Operators playing the stock but I think Aurum will go above 26% and then merge its real estate business into Majesco thereby taking its stake much above 51%. Gives it an easier way to list on the exchange and then raise funds for expansion through a public offer.
Open offer period - 19 May - 02 June
hi. any opinion on the buyback? go for it or hold on? it closes in 2 days.
what happens if u dont give shares in buyback?
the company supposedly had reserves left over of 105 cr after the earlier bb n divi but reported a loss now (in spite of no activity?). the assets seem to have gone up. hv i got that wrong? has aurum started sucking out cash?
any comments or guidance wld be welcome. tks!
Interesting Concall from Majesco (Name of the company will now become Aurum Proptech soon.)…the company is looking to build a complete property tech platform…worth tracking how they progress.
They have already acquired 51% in one company K2V2 for Rs 40 Cr. as a part of this endeavour…https://www.sell.do/
Company has cash of ~Rs 125 Cr. and the construction of the building is completed now which should be leased by the end of this quarter.
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Looks like they are growing both organically and in organically by acquiring other companies
They want to specialise in Real estate platform