TATA Consultancy Services

[panks_07]

Why is here a big difference in the futures and SPOT price.



Is it because of the INR 40/share dividend that TCS has declared in yesterdays quarterly results ?

 

[Alchemist]

Why is here a big difference in the futures and SPOT price.

View attachment 12

Is it because of the INR 40/share dividend that TCS has declared in yesterdays quarterly results ?

Yes, it seems like.

The dividend is 2% of the stock price and hence the discount in futures.

 

[panks_07]

Ok.

The record date is 18-OCT (Fri). On 21-OCT (Mon) the stock price should, theoretically, open INR 40 lower. Or somehow both prices should tend to converge, hopefully within the same day.

I will try to see that to confirm my learning.

 

[panks_07]

Ok.

The record date is 18-OCT (Fri). On 21-OCT (Mon) the stock price should, theoretically, open INR 40 lower. Or somehow both prices should tend to converge, hopefully within the same day.

I will try to see that to confirm my learning.

So it actually happened today, today being the Ex-dividend day. Stock Price and Future Price converged.
It reinstated the concept of Ex-dividend date, Record Date and T+2 settlement for me. All good.