Should I buy Majesco for Dividend?

Insurance technology firm Majesco Today announced that its board has approved payment of an interim dividend of Rs 974 per equity share for the financial year 2020-21.

So when this news comes out everyone is excited to know the details like “Is it a real or fake news?”, “Should I buy Majesco Share right now to get the dividend?”, “Is it safe to buy Majesco Shares right now?”, “What will be the price after the ex-date of this share?”. I’m going to give the answer to all of your questions. So read the full article carefully.

Lets Start with the very first question…

  1. Is it a real or fake new?

Yes! the news is 100% true.

2. Why should Company gives so high dividend?

So basically Majesco sells their main business which is operated in usa with excellent profit, that’s why Majesco’s management has approved payment of interim dividend at the rate of 19,480% i.e. Rs. 974/- per equity share of the face value of Rs 5/- each for the financial year 2020-21,” the company said in a release. This interim dividend payout translates to an amount of Rs 2,788.4 crore on a shareholder base of 28.577 million shares.

3. What is the future of this company after this news?

Management clearly said that they want to wind up the company means they want to close their business. So basically now Majesco has no business just a name with cash reserves estimated at Rs 103 crore & some properties to sell, that money will also be distributed after some time with their shareholders.

4. Should I buy Majesco Share right now to get the dividend?

See as you know that now Dividend tax norms are changed so based on that this dividend amount will calculated as Capital gain Tax. But in another hand when you sell the shares after record date that time stock price will adjust with the dividend price so you will be benefited with 15% capital loss tax. So if you are under 20% tax payer slab then your overall loss 5% or if you not under any tax payer norms then you don’t need to pay any tax.

Now decided based on your income tax profile.

5. What will be the price after the ex-date of this share?

On 22nd Dec before ex-date Majesco shares closed at Rs 990 then the next day on ex-date share price will be 990-974 = Rs 16.

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