InvestorQ : How will I get my dividends and bonus shares in my demat account?
Abhisha Yadav made post

How will I get my dividends and bonus shares in my demat account?

Answer
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ishika Banerjee answered.
2 years ago


These are all collectively called corporate actions. Corporate action is a process by which a company gives benefits to the investors who are holding securities of the company. Corporate actions are classified into two main categories, Cash and Non-cash corporate actions. Cash corporate action results in investors getting benefits in form of cash. Examples of cash corporate actions are payment of interest/dividend, etc. Non-cash corporate actions result in the investors getting benefits in form of securities. Examples of non-cash corporate action are bonus issue, rights issue, merger, split etc.
Remember a subtle difference here. The DP does not get involved with the cash corporate actions like dividends. It only uploads the list of shareholders to the registrar (RTA). Then it is the issuer / RTA that distributes the benefits of the cash corporate actions directly to the BOs. Based on the bank mandate given to the DP, the RTA will directly credit the dividend into the bank mandate of the investor mapped by IFSC Code and account number of the bank. The DP or the depository is not involved in any way. However, it is the Depository that takes care of distributing the benefits of non-cash corporate actions in demat form to the investors having their demat accounts. These include mergers, rights, splits etc.