Recovery of Unclaimed Dividends from IEPF of ICICI Bank LTD.

Stocks of ICICI Bank LTD. floated at the per-share price of over Rs. 597.75 as of 02 Feb 2021. The bank is among India’s largest private sector banks with a business growing continuously. ICICI bank has taken giant strides in growth since its inception. Obviously, due to enormous growth, shares have also grown tremendously. This has led the company to come up with stock splits to make its shares affordable for the common retail investors. Of course, the enormous growth has led to the company depositing huge chunks of dividends into the account of IEPF for the unclaimed shares and dividends.

Now, what do the above facts tell us about the bank? The unprecedented growth shown by the company has done one more thing. It has led to its old investors or shareholders who invested a small amount in its IPO a millionaire in today’s terms. This is brilliant for those who have continuously claimed the dividends released by the company. But what about those who invested a small amount years ago and then thinking that it might never show growth forgot about it? Well…even for those investors we have got news! They can still claim those dormant shares and the associated dividends.

The Government of India has established an authority (IEPF) to take care of the dormant shares and associated dividends of investors.  In this blog, we will learn about the history of ICICI bank and demonstrate how its share grew with a hypothetical investment and calculations based on it. We will then move forward to study the data associated with the ICICI bank’s dividends released and funds transferred to IEPF over the years. At last, we will understand how an investor can claim the dormant shares of ICICI lying with IEPF. We will also understand how legal help can go a long way in claiming unclaimed dividends.

So, without further ado..let us start with the history of ICICI bank.

How ICICI Bank Limited Has Grown?

Earlier, ICICI Bank was established as the Industrial Credit and Investment Corporation of India. it was a financial institution specialising in lending credit to industries. This was a government’s financial institution and a wholly-owned subsidiary located in Baroda till 1994. Its parent company was established in 1955 as a joint venture among the World Bank, Indian PSBs, and public-sector insurance companies. The venture was aimed at providing project financing to India’s industries. The bank’s name was changed to ICICI (short for Industrial Credit and Investment Corporation of India) Bank when it was divested by the government to act as an independent entity.  The parent company merged with the bank and the ICICI Bank came into being. It launched Internet Banking services to customers in 1998.

The parent company’s shareholding in ICICI Bank was reduced to 46%, through an IPO in 1998. This was followed by an equity offering by the company in form of American depositary receipts on the New York Stock Exchange in 2000. Later, ICICI Bank acquired the Bank of Madura Limited in 2001 in an all-stock deal. It later sold additional stakes to institutional investors in the interval 2001–02.

In the 1990s, ICICI led a major transformation in its business by offering diversified financial services through its various products and services. These products and services were offered by its number of affiliates and subsidiaries. As a result, the parent company’s revenue base grew. The bank did not stop there and in 1999, it became the first Indian company and bank from the non-Japanese region in Asia to be listed on the New York Stock Exchange.

In 2002, in a mega-merger drive, all major subsidiaries of the ICICI group like ICICI, ICICI Bank, ICICI Personal Financial Services Limited, ICICI Capital Services Limited, and others became one in a reverse merger.

In 2008, after the financial crisis, customers rushed to ICICI ATMs and main branches in some locations of the country due to rumours suggesting the adverse financial position of the bank. RBI issued a clarification on its financial strength to dispel those rumours. In March 2020, its board approved an investment of Rs. 1,000 crores in Yes Bank Ltd. This investment has raised its stake in the bank up to 5%.

It has a widespread network of almost 18,210 branches and ATMs. The Bank also boasts approximately 110 Touch Banking branches in over 30 Indian cities. Its international banking is aimed at providing solutions for the banking requirements of its Non-Resident Indian corporate clients. The international services are also focused on leveraging economic corridors between India and other countries. The bank also caters to female entrepreneurs through the Self-Help Group (SHG) program which is part of its microfinance initiatives.

With such a rich history, one can safely assume that the Bank has offered rich growth on its shareholding for the investors. In the next section, we will take up a hypothetical investment made in the company in 1998 and see how it would have grown over the years.

The calculation for ICICI Bank’s Share Growth

• Suppose a shareholder had 600 shares of ICICI Bank Ltd. registered under his/her name in June 1998 at a per-share price of Rs. 4.99.

Now the general value of the investment is 600 shares x Rs. 4.99 = Rs. 2994.

• One can simply point out that this is a very small investment to make. Grandparents or parents might make such investments and forget to tell their family about it or forget it themselves because of ageing. This leads to shares remaining dormant for years.
• Now, the price of ICICI shares have kept on increasing since 1998 and consequently, the Bank had to announce a stock split in 2014 in the ratio of 1:5 to let the small-time retail investors gain access to the company’s shares.

Announcement Date	Old Face Value	New Face Value	Record Date	Ex-Split Date
09/09/2014	10	2	05/12/2014	04/12/2014

 

• Due to the split in 2014, which was within the ratio 5:1 made the entire no. of shares 3000 (600×5). Each share had an equal value which was 1/5 of the entire value of one stock. This meant that the total value of ownership remained constant at that time with only the no. of shares increasing and the corresponding price decreasing.
• The company kept on growing and its share price also increased steadily since 2014. And in 2017 it announced bonus shares for its investors in the ratio of 1:10. This meant for every 10 shares of the client the company was offering 1 bonus share. The details of the bonus shares announced are given below:

Bonus History:

Announcement Date	Bonus Ratio	Record Date	Ex-Bonus Date
03/05/2017	1 : 10		20/06/2017

 

Source: https://in.investing.com/equities/icici-bank-ltd-historical-data?end_date=1615434498&interval_sec=monthly&st_date=884457000

https://economictimes.indiatimes.com/icici-bank-ltd/infocompanysplits/companyid-9194.cms

https://economictimes.indiatimes.com/icici-bank-ltd/infocompanybonus/companyid-9194.cms

• Now, because of these huge bonus shares announced by the bank, the net number of shares become 3000 + 300 bonus shares, that is 3300 shares.
• Now if we calculate the price of these shares as per the current scenario (per share price of Rs. 597.75) the total value of the investment would be:

3300 shares x Rs. 597.75 = Rs. 19, 72, 575.

• Now compared to the initial investment almost Rs. 3000, this return is tremendous. And we haven’t even added the dividends declared for all these years in this amount. If we add that, the net returns will skyrocket to multimillion rupees.

As you can see, from the above calculations that the ICICI bank shares from two decades ago could have fetched an enormous profit to their investors. The bank has also provided its investors’ huge dividends and thus, has been a preferred shareholding for several investors. Now we just want you to imagine a scenario where you suddenly found physical shares of your grandpa from the 90s related to ICICI bank. Even a small investment made in that era would have grown manifolds now. But, how to claim these shares? What will be the dividends on such shares? Let us find the answer to such questions in the next sections.

Dividend History of ICICI Bank LTD.

The following table provides a detailed account of dividends released by ICICI since 1998. One can simply study the table to do an in-depth analysis of what dividend any investment after 1997 would have generated?

Announcement Date	Effective Date	Dividend Type	Dividend (%)	Remarks
06/05/2019	22/07/2019	Final	50%	Rs.1.0000 per share (50%) Final Dividend
07/05/2018	24/08/2018	Final	75%	Rs.1.5000 per share (75%) Dividend. (Revised)
04/05/2017	20/06/2017	Final	125%	Rs.2.5000 per share (125%) Dividend
29/04/2016	16/06/2016	Final	250%	Rs.5.0000 per share (250%) Dividend
27/04/2015	04/06/2015	Final	250%	Rs.5.0000 per share (250%) Dividend
25/04/2014	05/06/2014	Final	230%	Rs.23.0000 per share (230%) Dividend
26/04/2013	30/05/2013	Final	200%	Rs.20.0000 per share (200%) Dividend
27/04/2012	31/05/2012	Final	165%
28/04/2011	02/06/2011	Final	140%
26/04/2010	10/06/2010	Final	120%
27/04/2009	11/06/2009	Final	110%
28/04/2008	10/07/2008	Final	110%	AGM
30/04/2007	14/06/2007	Final	100%	AGM
29/04/2006	06/07/2006	Final	85%	AGM
02/05/2005	04/08/2005	Final	85%	AGM
30/04/2004	02/09/2004	Final	75%
25/04/2003	04/08/2003	Final	75%	AGM
03/05/2002	03/09/2002	Final	0%	AGM & Nil Final Dividend
22/01/2002	21/02/2002	Interim	20%
24/04/2001	08/05/2001	Final	20%
25/04/2000		Interim	15%
22/04/1999		Final	12%	AGM & Dividend
22/04/1998		Final	10%

Source: https://economictimes.indiatimes.com/icici-bank-ltd/infocompanydividends/companyid-9194.cms

Under the IEPF rules, the corporate is obliged to release the dormant shares of shareholders to the IEPF authority’s account. The bank releases the dates of transfer for the dividends and the last date to lay a claim on them before they get deposited into the government’s fund. One can read the next table to know the last dates of claiming funds for the subsequent financial years.

Dates for Unclaimed Dividend Transfer to IEPF by ICICI Bank

Dividend for the year ended	Date of Declaration of dividend	Last date for claiming dividend
March 31, 2012	July 13, 2012	July 12, 2019
March 31, 2013	June 27, 2013	June 26, 2020
March 31, 2014	June 25, 2014	June 24, 2021
March 31, 2015	July 21, 2015	July 20, 2022
March 31, 2016	July 21, 2016	July 20, 2023
March 31, 2017	July 24, 2017	July 23, 2024
March 31, 2018	June 29, 2018	June 28, 2025

https://nli.icicibank.com/NewRetailWeb/showUnclaimedForm.htm

If the shareholders want to claim their old investment before the deadline ends then they must reach the nodal officer or transfer agency of the bank to get the details of their lost shares. The shareholders can reach the nodal officer with the requisite set of documents to prove the ownership of shares and therefore get the dividends if they are still not transferred to the IEPF fund. Here are the details of the Nodal officers of the bank.

Nodal Officer: Mr. Ranganath Athreya

Deputy Nodal Officer (Equity shares): Mr. Prashant Mistry

Deputy Nodal Officer (Bonds): Mr. Dinesh Chheda

Email: [email protected] 

An investor can also check the status of their unclaimed shares of ICICI bank LTD. and associated returns on the following link:

https://nli.icicibank.com/NewRetailWeb/showUnclaimedForm.htm

Investor Education and Protection Fund – A Brief Insight

The introduction of the IEPF or Investor Education and Protection Fund in 2016 was a major reformist step. From the earliest time of Independence, the Indian stock exchange had no regulations or a statutory body that would oversee the difficulty of unclaimed dividends. In 2016, the Govt. founded the IEPF authority and came up with the regulations related to it. Here are basic changes suggested by the IEPF rules and therefore the subsequent amendments associated with the transfer of unclaimed dividends to the IEPF account.

• Investors must claim their dividends from the corporate within 30 days of its declaration.
• The companies were asked to make a separate account for unclaimed dividends where the dividends should be transferred in case they are not claimed by the investors within 30 days.
• If the investor wants to claim the dividends from the special account after 30 days, they must reach the company’s transfer or nodal officer with the prescribed set of documents.
• Companies should periodically inform their shareholders that their dividends are transferred to the unclaimed dividend accounts and that they must claim it before it gets transferred to the IEPF.
• Companies are also obliged to publish the list of investors whose dividends are transferred to their IEPF unclaimed dividend account.
• The company should communicate the data regarding dividend transfers individually to the investors via email or letters.
• If the investor fails to ask for the dividends from the company for 7 years after the transfer to an unclaimed dividend account, then the dividends must be transferred to IEPF.
• All companies should release the list of shareholders per annum whose shares have been transferred to the IEPF.
• After seven years, the shareholder must make the application to IEPF to claim their dormant shares.

With these rules, MCA aimed to streamline the method of claiming the dividends which are dormant. The entire procedure was aimed at making the dividend claim process regularised and transparent. The method to say dividends from IEPF is additionally organised and goes through tons of scrutiny to make sure that the dividends enter the hands of legal owner and are free from any fraudulent claim.

Process to Claim Dividends of ICICI Bank from IEPF

The process to lay claim dividends from IEPF might sound a touch complex as there are tons of documents and know-how involved. Here we have tried to elucidate the method in simple steps so that even a layman can understand the fundamentals of the IEPF claim of shares process. Here are the essential steps to say dividends from IEPF.

1. The shareholder is suggested to get in touch with the company’s nodal officer and obtain all the small details concerning his owned shares and therefore the related claim process. The nodal office also will give the investor the list of documents that require to be submitted with the form.
2. The shareholder then must visit the web site of IEPF and fill the IEPF form thereon by submitting his details and other details regarding his/her ownership of shares.
3. After filing the claim, the investor must take a printout of the completed form and compile all the copies of necessary documents as prescribed by the IEPF website and Nodal officer.
4. After compilation, the claimant must send the file to the Nodal officer who will check the documents to analyse the ownership of the claimant on the shares and verify the small details as per the form submitted.
5. The nodal officer will create a claim verification report supporting the claim file and send it within 15 days of receiving it (from the claimant) to the IEPF Authority’s regional fund manager.
6. The fund manager after receiving the file will scrutinise the claim verification report alongside the claim form and therefore the copies of other documents.
7. After thorough verification, the fund manager may take any of the subsequent three actions.

1. He can ask for some additional documents from the claimant or nodal officer, and they should be sent by them in 15 days.
2. He may reject the form thanks to some error within the application or missing documents that were not furnished on time.
3. He can sanction the claimed amount after successful scrutinization of the claim file.

Necessity of Legal Help to Claim ICICI’s Old Shares

You might have noticed within the previous sections that a thorough scrutiny of the claim form is conducted by the Nodal officer as per the rules of IEPF Authority. This is often done to make sure that there is zero chance of any fraudulent claim. The ownership documents of shares are thoroughly scrutinised, and the background of the subsequent documents is checked. Also, the claim form is verified thoroughly, and even small errors during filing should be rectified in time or failure to do so may lead to cancellation of the claim.

The long verification process makes the claim process a touch time consuming and tedious for a standard investor. To save valuable time and effort of filing and getting the claim approved by the authority, a shareholder must hire a reputed legal consultancy firm. These firms specialize in the filing of IEPF form and thus chances of any error in the application are reduced to zero. Also, most of these firms offer end-to-end liaising with the nodal officer and the IEPF authority in case of any missing document or other issues with the claim application.

Considering all the above reasons one can safely assume that the recovery of ICICI shares is indeed a profitable option for the investors and that they must check out the investment portfolio of their elders to seek for any dormant shares of ICICI Bank LTD. The investors can simply hire a legal consultancy firm and wait for the claim to be passed by the authority.  In the meanwhile, they can focus on their core businesses or day-to-day chores without worrying about their claim.