ITC shares reach all-time high ahead of ex-dividend

ITC (Indian Tobacco Company), the cigarette-to-hotels conglomerate, is set to go ex-dividend later today. Ahead of that, the company had a historic day in the market. During intraday trading on Monday, the stock scaled around 2% to cross the Rs. 450 mark. It was the first time the FMCG major managed to top Rs. 450.

ITC's performance during Monday's intraday trading is not surprising. The company has been one of the top gainers in Nifty this year with over 30% gain. In the last three months, the company saw an increase of 19.22%. ITC has also been one of the best-performing stocks over the past year. Its share price returns have risen by 66.83% in the last 12 months.

When ITC's board declared its March quarter results, it also recommended a final dividend of Rs. 6.75 and a special dividend of Rs. 2.75 per share. The total dividend for FY23 is set to be Rs. 15.5, considering the interim dividend of Rs. 6 announced in February. The company fixed May 30 to determine the eligibility of shareholders.

ITC will go ex-dividend today. When a company goes ex-dividend, its shares do not carry the value of the declared dividend from that date onward. The ex-dividend also determines which shareholders are eligible to receive the dividend. It is usually set a day or two before the record date, the date by which one has to be registered to receive the dividend.

To receive dividends, investors have to buy shares before the ex-dividend date. Therefore, leading up to the ex-dividend date, the price of the stock increases as more people buy it. In fact, they would be willing to pay a premium to buy shares of the company. ITC's intraday rally is closely related to the ex-dividend date.

ITC's shares hit a 52-week high of Rs. 451.4 on Monday but closed slightly lower at Rs. 448.95. In the last quarter, ITC's revenue rose 6.14% year-over-year to Rs. 17,224 crore. It recorded a standalone profit of Rs. 5,086.9 crore, a 21.37% year-over-year increase.