RVNL Shares To Remain In Focus On Wednesday As The Multibagger Stock Will Trade Ex-Dividend Tomorrow

Rail Vikas Nigam Ltd (RVNL) shares will remain in focus on Wednesday as the stock will trade ex-dividend tomorrow. RVNL shares closed almost 3% lower on Monday (September 18) at Rs 165.35 per share. The stock will resume trading on Wednesday, after a day's holiday on account of Ganesh Chaturthi. Mostly it is seen that after a stock goes ex-dividend, its share typically falls by the amount of the dividend paid to reflect the fact that new shareholders are not entitled to that payment.

Ex-dividend usually denotes a stock that trades without carrying the value of the next dividend payment. The ex-dividend date is the day the stock begins trading and the value of its next dividend payment.

Usually, the ex-dividend date for a stock is one business day prior to the record date, indicating that an investor who purchases the stock on its ex-dividend date or afterward will not be entitled to receive the declared dividend.

The railway stock is one of the favorite stocks for investors, thanks to its stupendous last one year and last three years performance in terms of returns delivered. RVNL is a multi-bagger stock as it's shares have gained up to 389% in last one year, while its last three years' returns have increased over 650%. In this year so far the share price of RVNL has gained nearly 142%.

Apart from the attractive returns delivered by the stock, the company has bagged orders for major government projects recently. Last month, in an exchange filing the company said that it has emerged as the Lowest Bidder (L1) in several projects of Maharashtra Metro Rail Corporation Limited. As per the company, the cost of the project was Rs. 256,19,87,814. Rail Vikas Nigam Ltd also received a Letter of Award from the Haryana Rail Infrastructure Development Corporation (HRIDC) for a project worth Rs 1,088 crore.

Why does a company's share price trade lower on the Ex-Dividend Date?

The price of a stock is likely to fall by the amount of the dividend on its ex-dividend date, indicating that the company's assets will soon be falling by the amount of the dividend.

The Indian equity market closed in red on Monday. The benchmark index Sensex closed 0.36% lower at 67,596.84 while the Nifty was down 0.29% at 20,133.30 points.