As the record date for CDSL's bonus issue comes on Saturday, investors might think Friday is the last day to buy the shares to become eligible for bonus issue. However, Thursday is the last date to buy because of T+1 trade settlement system.

What Happened: CDSL recently announced a 1:1 bonus issue, which means that an investor will receive one share for every share they hold in the company. CDSL announced August 24, Saturday as the record date for the bonus issue.

Since Saturday is a trading holiday, it can be assumed the date to buy the shares is Friday. But that's not the case. 

In India, trade is settled in T+1 basis, meaning that a transaction will be reflected on the demat account one day after it is executed.

Suppose an investor buys a share on Monday, even though the money is debited from their account, the shares are not delivered to the demat account on Monday. The shares will be reflected on the demat account on end of Tuesday. 

See Also: Tata Electronics’ Revenue Rockets To ₹3,802 Cr Following Acquisition Of Apple’s iPhone Assembly Plant: Report

The same case happens for sellers. If someone sells a share on Monday, the shares are blocked on the account but the investor will only get their money at the end of Tuesday. 

Hence in order for an investor to be eligible for bonus issue of CDSL, one should buy the shares on Thursday as the shares will be delivered to your demat account by Friday end and only then will you own the shares on the record date. 

If someone buys the shares on Friday, even though money has been debited, the shares are not delivered to your account and since Saturday is market holiday the settlement happens on Monday, by the time record date is over and the investor won't be eligible for the bonus issue. 

Price Action: Shares of CDSL rose 2.26% to ₹2,931 on Thursday afternoon. 

Read Next: GAIL And Petron Ink MoU For Bio-Ethylene Plant In India