ITC shares reach all-time high ahead of ex-dividend
ITC (Indian Tobacco Company), the cigarette-to-hotels conglomerate, is set to go ex-dividend later today. Ahead of that, the company had a historic day in the market. During intraday trading on Monday, the stock scaled around 2% to cross the Rs. 450 mark. It was the first time the FMCG major managed to top Rs. 450.
ITC has gained over 65% in a year
ITC's performance during Monday's intraday trading is not surprising. The company has been one of the top gainers in Nifty this year with over 30% gain. In the last three months, the company saw an increase of 19.22%. ITC has also been one of the best-performing stocks over the past year. Its share price returns have risen by 66.83% in the last 12 months.
Total dividend of FY23 is set to be Rs. 15.5
When ITC's board declared its March quarter results, it also recommended a final dividend of Rs. 6.75 and a special dividend of Rs. 2.75 per share. The total dividend for FY23 is set to be Rs. 15.5, considering the interim dividend of Rs. 6 announced in February. The company fixed May 30 to determine the eligibility of shareholders.
Shares do not carry dividend value from the ex-dividend day
ITC will go ex-dividend today. When a company goes ex-dividend, its shares do not carry the value of the declared dividend from that date onward. The ex-dividend also determines which shareholders are eligible to receive the dividend. It is usually set a day or two before the record date, the date by which one has to be registered to receive the dividend.
People buy more ahead of the ex-dividend day
To receive dividends, investors have to buy shares before the ex-dividend date. Therefore, leading up to the ex-dividend date, the price of the stock increases as more people buy it. In fact, they would be willing to pay a premium to buy shares of the company. ITC's intraday rally is closely related to the ex-dividend date.
ITC recorded a 21.37% increase in profit in March quarter
ITC's shares hit a 52-week high of Rs. 451.4 on Monday but closed slightly lower at Rs. 448.95. In the last quarter, ITC's revenue rose 6.14% year-over-year to Rs. 17,224 crore. It recorded a standalone profit of Rs. 5,086.9 crore, a 21.37% year-over-year increase.
