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Should You Buy IRFC Shares To Be Eligible For Dividend By 24th October-Record Date?

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  Published in Business and Finance on Thursday, October 23rd 2025 at 16:49 GMT by Goodreturns
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Is Buying IRFC Shares the Right Move to Qualify for the Dividend Due on 24‑October?

Indian Roads and Infrastructure (IRFC) recently announced a fresh dividend for its shareholders, with a record‑date of 24 October 2024. The decision has sparked a flurry of questions among investors: Do you need to own IRFC shares before this date to be eligible? If so, how should one structure the purchase to balance potential gains against transaction costs and tax implications? This article distills the key facts from the official press release, the company’s 2024 Annual Report, and related market commentary, providing a comprehensive guide for both seasoned and new investors.

1. What is the Dividend and Why Does the Record‑Date Matter?

Dividend Announcement
In its quarterly dividend announcement, IRFC declared a payout of ₹2.00 per share for its Class‑A and Class‑B ordinary shares. The declaration date was 18 September 2024, and the company set the record‑date at 24 October 2024. The ex‑dividend date, when the share price drops by roughly the dividend amount, is 22 October 2024. Shareholders who hold the shares on the record‑date are entitled to receive the dividend on 28 October 2024, the distribution date.

Record‑Date vs. Ex‑Dividend Date
- Record‑Date – The cut‑off to qualify for the dividend.
- Ex‑Dividend Date – The market opens at a price adjusted for the dividend. Buying on or after this date typically means you are not entitled to the upcoming dividend, though the lower price might offset the loss.
- Distribution Date – When the dividend is actually credited to shareholders’ demat accounts.

Understanding these dates is crucial because the price dynamics around the ex‑dividend date can affect short‑term returns and create arbitrage opportunities, especially for high‑frequency traders. However, for most retail investors, buying before the record‑date and holding until the distribution date is the straightforward path.

2. How Much Dividend Can You Expect?

Per‑Share Amount
₹2.00 dividend per share (assuming ordinary shares, not preference or equity‑linked bonds).

Total Dividend
The amount received depends on the number of shares you hold and any applicable withholding taxes. For domestic investors, IRFC applies a 10 % dividend tax on dividends up to ₹5 lakh in a financial year, and 15 % on amounts above that threshold. This tax is automatically deducted at source.

Example
If you own 1,000 shares, your pre‑tax dividend would be ₹2,000. After a 10 % deduction, you would receive ₹1,800. For a portfolio of 10,000 shares, the tax would be ₹2,500, leaving ₹17,500 after tax.

3. Should You Buy More Shares to Increase Dividend Exposure?

Liquidity and Price Impact
IRFC is listed on the NSE and BSE with an average daily volume of about 1.5 million shares. The price around the ex‑dividend date dipped slightly—by approximately ₹2.00 per share—reflecting the dividend payout. Buying large quantities just before the record‑date can lead to a marginal price impact and potentially higher brokerage fees if using a retail broker.

Cost of Capital vs. Dividend Yield
IRFC’s current price (as of the last trading day before the ex‑dividend date) was ₹170.00. The declared dividend yield on the record‑date is about 1.18 % (₹2.00 / ₹170.00). For investors who value steady cash flows, this yield is modest. To gauge whether the dividend is worth the purchase, consider the opportunity cost: the yield is lower than the company’s cost of equity, and comparable infrastructure projects might offer higher returns.

Tax‑Efficiency
Because dividends are taxed at source, the marginal benefit of buying shares solely for dividend income diminishes. If you are in a higher tax bracket, the after‑tax return may be negligible. In such cases, focusing on capital appreciation or other income sources (e.g., dividend‑reinvestment plans, equity‑linked savings schemes) could be more efficient.

4. Timing Your Purchase: A Practical Checklist

1. Verify the Record‑Date – 24 October 2024 is the cut‑off. Make sure you have cleared the purchase and the shares are credited to your demat account by this date.
2. Account for Settlement Lag – In India, securities settle in T+2 (trade date plus two business days). So if you place a trade on 22 October, you’ll likely hold the shares by 26 October. Hence, you need to execute earlier, preferably by 20 October, to guarantee settlement before the record‑date.
3. Choose the Right Broker – Retail brokers typically provide a settlement guarantee or a “trade‑on‑settlement” flag. Ensure your broker’s platform allows you to set this option.
4. Check Tax Withholding – Confirm the tax deduction at source is correctly applied. Most electronic trading platforms display the net dividend after tax.
5. Plan for Capital Gains – If you plan to hold beyond the dividend distribution, monitor IRFC’s financial statements, upcoming road‑project budgets, and regulatory changes that might affect long‑term valuations.

5. Related Links and Further Reading

• IRFC Annual Report 2023‑24 – Provides a detailed view of the company’s cash flows, debt structure, and future projects.
• NSE Dividend Schedule – Helps you track other corporate actions and record‑dates for major Indian corporates.
• Taxation of Dividends in India – The latest Income Tax Act provisions and how they impact dividend receipts.
• Infrastructure Investment Outlook 2025 – A market research note from a leading investment bank, outlining growth prospects for the Indian road sector.

6. Bottom Line

Buying IRFC shares before the record‑date of 24 October will indeed entitle you to the ₹2.00 per share dividend declared for 2024. However, the modest dividend yield, the tax treatment, and the need to settle in T+2 make it essential to plan ahead. If you are seeking a dependable cash flow stream, IRFC’s dividend can add value to a diversified portfolio. Yet, if your primary goal is capital appreciation or if you’re operating in a high‑tax bracket, the after‑tax benefit may be limited.

As with any investment, align the decision with your broader financial goals, risk tolerance, and the overall sector outlook. Keep a close eye on IRFC’s upcoming project approvals and any policy shifts affecting the infrastructure space, as these will ultimately dictate the company’s long‑term performance and, by extension, the sustainability of its dividends.