Definition
Corporate Action
A corporate action is any event initiated by a company that affects its shares or shareholders, such as dividends, splits, bonuses, or mergers.
Corporate actions include cash events (dividends, buybacks) and capital events (bonus issues, stock splits, rights issues, mergers, demergers). They directly affect your holdings, count, value, or both, and are processed automatically through the depository.
Each action has key dates, the record date and ex-date, that decide eligibility. Companies announce corporate actions via the NSE/BSE, and investors must track them to understand price adjustments and to claim entitlements like bonus shares or dividends.
Related terms
- Ex-DateThe ex-date is the cut-off day from which a stock trades without the right to an upcoming corporate action like a dividend, bonus, or split.
- Record DateThe record date is the date on which a company checks its books to decide who is eligible for a dividend, bonus, or other corporate action.
- DemergerA demerger is when a company splits off a business division into a separate, independently listed company, giving shareholders shares in both.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.