Recovery of Unclaimed Dividends from IEPF of Hindustan Unilever Limited
Hindustan Unilever Limited (HUL) is one of the largest Indian FMCG conglomerates and has constantly provided handsome returns and dividends on its shareholding to its investors. With business growing continuously, Hindustan Unilever company has taken humongous strides in growth over the past two decades. Now, since the inception of IEPF, the company has started depositing a huge chunk of its unclaimed dividends to it as it has a lot of dormant shares due to long years of operation.
There are a huge no. of shares and dividends transferred by Hindustan Unilever Limited to the IEPF. This might make some people scroll through their investment history to find if they have any unclaimed shares of HUL left dormant or not. To those who do have old shares (count 25+ years) of Hindustan Unilever Limited, have a permanent reason to smile. These shares would now have increased to tremendous values. We can say that finding dormant shares of HUL and raising a claim for the same from IEPF can make any investor rich. To get answers to queries like what is IEPF? and how old dormant shares of HUL are going to make someone rich in a short span? stay with us till the end of this piece.
Brief about Hindustan Unilever Limited’s History
Hindustan Unilever Limited is a leading name among Indian manufacturers. It is based in the country and is a market leader among consumer goods companies. Its consumer goods business comprises home and personal care products, foods, and refreshments products. Its other segments are Home Care products, detergent bars, and powders, cleaning liquids, scourers, and water business. It also has Beauty products in the categories of oral care, skincare and haircare, deodorants, talcum powder, color cosmetics, and salon services. The Foods & Refreshment segment includes staples, culinary products, coffee, tea, frozen desserts, and others. It’s nutritional products include infant care products, health food drinks like Horlicks, Boost, Maltova, and Viva.
HUL is one of India’s leading private sector FMCG companies and among the firsts to complete 75 years. Over the years, the shares of Hindustan Unilever Limited have shown tremendous growth leading to the company giving bonus shares and splitting its stocks. In this blog, we will understand how the value of even a small investment in Hindustan Unilever Limited could be worth millions at today’s rates. We will also understand what will be the ideal way for the investor to recover such an amount? Let us understand the growth with the following hypothetical scenario.
Calculation
- Suppose an investor had 900 shares of Hindustan Unilever Limited registered in 1978 which would have cost approx Rs. 1200 considering the share price of HUL in 1997 was around 2.7 rs. Per share.
- Now, the prices of Hindustan Unilever Limited shares have kept on increasing since 1978 and the company had announced a decent no. of bonus shares for its investors over the years. Let us look at the bonus history of HUL in the following table.
Bonus History of HUL
| Announcement Date | Bonus Ratio | Record Date | Ex-Bonus Date |
|---|---|---|---|
| 30/09/1991 | 1 : 2 | 21/08/1991 | 19/07/1991 |
| 22/06/1987 | 1 : 1 | ||
| 22/06/1983 | 3 : 5 | ||
| 22/06/1979 | 1 : 3 |
- If we look closely, the bonus shares announced in 1979 were in the ratio 1:3 which meant for every three shares owned by the investor, HUL gave one bonus share. So the total value of shares in 1979 became 1200 ( 900 original + 300 bonus ) shares.
- Similarly, in 1983, the company announced bonus shares in the 3:5. This took the total no. of shares to 1920 (1200 original + 720 bonus shares).
- With bonus shares announcement in ratio 1:1 in 1987, the total no. of shares became 3840 (1920 original + 1920 bonus).
- Lastly, in 1991, bonus shares were announced in the ratio 1:2 which took the total no of shares to 5760 (3840 original + 1920 bonus shares).
- The stock prices of HUL kept on increasing in the following years and hence the company had to cut down per share price by announcement of stock split in the ratio 1:10. This increased the existing no. of shares 10 times and decreased the per share price by 1/10th. Hence, the overall value of investment remained unchanged. Stock split decreased per share price of HUL and made the share affordable for small retail investors. The following table gives details of the stock split announced in 2000.
| Announcement Date | Old FV | New FV | Record Date | Ex-Split Date |
|---|---|---|---|---|
| 05/07/2000 | 10 | 1 | 03/07/2000 |
- Due to the stock split in 2000, which was in the ratio 1:10 took the total no. of shares to 57600. Each share had the same value of 1/10 of the earlier value of a single stock.
- Now the value of shares have kept on increasing over the years and the total value of investment as per the rate of May 2021 becomes:
57600 shares x Rs. 2,340.05 = Rs. 13,47,86,880 (Thirteen Crores Forty Seven Lakhs Eighty Six Thousand Eight Hundred and Eighty).
The above amount is obviously indicating a humongous increase in share prices in 40+ years. This data is enough to show why is it a good idea to go for the IEPF recovery of shares of Hindustan Unilever Limited.
As one can see, from the above calculation, the Hindustan Unilever shares from three decades ago can fetch a huge amount to its investors. The company has also given its investors huge dividends for the shares and has been a preferred stock of many people. If we add the returns made by the dividends to the total amount calculated in the previous calculation, then the corresponding net returns on the investment will be even more than the share growth. These huge figures are clear indicators which suggest that old shares of HUL are a hidden treasure. In the next section, we have shown the data of dividends released by HUL in the previous two and a half decades. Investors could easily calculate net dividends offered by the firm. We have followed it up with information on recovery of shares from IEPF.
Dividend History of Hindustan Unilever Limited
The following table has a detailed account of dividends released by HUL in the past 2.5 decades. Investors can simply run an analysis of the table and find out the corresponding dividends for the required year.
| Announcement Date | Effective Date | Dividend Type | Dividend (%) | Remarks |
|---|---|---|---|---|
| 29/04/2021 | 14/06/2021 | Final | 1700% | Rs.17.0000 per share (1700%) Final Dividend |
| 07/10/2020 | 28/10/2020 | Interim | 1400% | Rs.14.0000 per share (1400%) Interim Dividend |
| 13/07/2020 | 30/07/2020 | Special | 950% | Rs.9.5000 per share (950%) Special Dividend |
| 30/04/2020 | 19/06/2020 | Final | 1400% | Rs.14.0000 per share (1400%) Final Dividend |
| 09/10/2019 | 23/10/2019 | Interim | 1100% | Rs.11.0000 per share (1100%) Interim Dividend |
| 03/05/2019 | 20/06/2019 | Final | 1300% | Rs.13.0000 per share (1300%) Final Dividend |
| 01/10/2018 | 25/10/2018 | Interim | 900% | Rs.9.0000 per share (900%) Interim Dividend (Revised). |
| 14/05/2018 | 21/06/2018 | Final | 1200% | Rs.12.0000 per share (1200%) Final Dividend. |
| 11/10/2017 | 01/11/2017 | Interim | 800% | Rs.8.0000 per share (800%) Interim Dividend. |
| 18/05/2017 | 22/06/2017 | Final | 1000% | Rs.10.0000 per share (1000%) Final Dividend. |
| 14/10/2016 | 01/11/2016 | Interim | 700% | Rs.7.0000 per share (700%) Interim Dividend |
| 09/05/2016 | 22/06/2016 | Final | 950% | Rs.9.5000 per share (950%) Final Dividend |
| 05/10/2015 | 19/10/2015 | Interim | 650% | Rs.6.5000 per share (650%) Interim Dividend |
| 08/05/2015 | 19/06/2015 | Final | 900% | Rs.9.0000 per share (900%) Final Dividend |
| 16/10/2014 | 31/10/2014 | Interim | 600% | Rs.6.0000 per share (600%) Interim Dividend |
| 28/04/2014 | 11/06/2014 | Final | 750% | Rs.7.5000 per share (750%) Final Dividend |
| 15/10/2013 | 31/10/2013 | Interim | 550% | Rs.5.5000 per share (550%) Interim Dividend |
| 29/04/2013 | 10/07/2013 | Final | 600% | Rs.6.0000 per share (600%) Final Dividend |
| 18/10/2012 | 01/11/2012 | Interim | 1250% | Rs.4.5000 per share (450%) Interim Dividend & Rs.8.0000 per share (800 %) Special Dividend |
| 01/05/2012 | 04/07/2012 | Final | 400% | |
| 17/10/2011 | 04/11/2011 | Interim | 350% | |
| 09/05/2011 | 08/07/2011 | Final | 350% | |
| 14/10/2010 | 01/11/2010 | Interim | 300% | |
| 25/05/2010 | 08/07/2010 | Final | 350% | |
| 15/10/2009 | 06/11/2009 | Interim | 300% | |
| 11/05/2009 | 12/06/2009 | Final | 400% | |
| 15/07/2008 | 04/08/2008 | Interim | 350% | |
| 13/02/2008 | 17/03/2008 | Final | 300% | |
| 23/10/2007 | 07/11/2007 | Interim | 300% | Dividend (Platinum Jubilee) |
| 23/07/2007 | 07/08/2007 | Interim | 300% | |
| 20/02/2007 | 20/04/2007 | Final | 300% | AGM |
| 10/07/2006 | 08/08/2006 | Interim | 300% | |
| 14/02/2006 | 28/04/2006 | Final | 250% | AGM |
| 25/07/2005 | 08/08/2005 | Interim | 250% | |
| 11/02/2005 | 07/06/2005 | Final | 250% | AGM |
| 20/07/2004 | 13/08/2004 | Interim | 250% | |
| 17/02/2004 | 14/05/2004 | Final | 300% | |
| 16/07/2003 | 14/08/2003 | Interim | 250% | |
| 29/01/2003 | 04/04/2003 | Final | 300% | AGM |
| 10/07/2002 | 07/08/2002 | Interim | 250% | |
| 22/01/2002 | 08/04/2002 | Final | 250% | AGM |
| 29/06/2001 | 16/07/2001 | Interim | 250% | |
| 15/02/2001 | 27/03/2001 | Final | 200% | |
| 28/07/2000 | Interim | 150% | ||
| 23/02/2000 | Final | 170% | AGM and Final Dividend | |
| 20/08/1999 | Interim | 120% | ||
| 15/02/1999 | Final | 12% | ||
| 26/07/1998 | Interim | 120% | (Revised) | |
| 12/02/1998 | Final | 95% | ||
| 05/08/1997 | Interim | 75% | ||
| 22/03/1997 | Final | 65% |
As per the IEPF rules a company is obliged to give details of the shareholders who have unclaimed dividends. Investors can refer to such lists to find out whether their old shares have been transferred to the IEPF by the company or not. After knowing the status of their share, they can choose the appropriate way to claim the shares. If the shares have not been transferred to the IEPF yet, then they can approach the nodal officer of the company to claim the unclaimed shares and dividends.
The HUL shareholders can reach its nodal officer with the prescribed set of documents to prove their ownership of shares and the dividends. Here are the details of the HUL’s Nodal officer.
Mr. Mr. Dev Bajpai (Nodal Officer)
Email: [email protected]
Deputy Nodal Officer
Mr. Satheesh H K
Email: [email protected]
An investor can check the status of their unclaimed dividend of Hindustan Unilever Limited and associated returns on the following link:
Understanding IEPF Authority and its Rules
The GoI has set a target of making our country a 5 trillion-dollar economy before 2024. To achieve this target, it has to continuously reform the financial and other economic sectors of the country. Be it IBC 2016 or any other banking reforms, the Govt. has been taking decisions to make the Indian financial sector more organised. The introduction of IEPF or Investor Education and Protection Fund was also one such reformist step in the year 2016. Since Independence, the Indian stock market had no regulations for dormant dividends. Neither it had any statutory body that can oversee the problem of unclaimed dividends.
In 2016, the IEPF authority came up with the regulations associated with unclaimed shares and Dividend after its inception. The IEPF regulations along with the Companies Act 2013 made it mandatory for all listed companies to transfer dormant shares to its fund. These were the basic changes suggested in the rules and the subsequent amendments were made for transfer of unclaimed dividends to the IEPF fund.
- An investor can claim dividends from the company within 30 days of declaration.
- The companies need to create a separate unclaimed dividend account to transfer unclaimed shares older than 30 days.
- If the investor wants to claim the dividends, they need to raise a request to the company’s transfer or nodal officer with the prescribed set of ownership documents.
- The company must inform the stockholders that their dividends have been transferred to the company’s unclaimed dividend account. The stockholders can claim it in the next seven years before they get transferred to the IEPF.
- The company must release the information regarding dividend transfers to the shareholders through email and letters.
- If the investor fails to claim dividends from the company’s unclaimed dividend account for 7 continuous years, then the dividends must be transferred to IEPF.
- The company has to release a list of investors whose shares have been transferred to the IEPF every year.
- After seven years, the stockholders must raise the claim to IEPF to get the dividends. The claim can be made with the help of a financial and legal advisory firm.
With these rules, the process of claiming the dormant dividend streamlined. The whole process has become more transparent. The process to claim dividends is also fairly organised and goes through a lot of scrutiny. This ensures that the dividends go in right hands and are free of any fraud.
Before the IEPF regulations, the businesses used to transfer unclaimed dividends or shares to the public funds for welfare schemes. Govt. then used such funds for various public welfare works and various development of infrastructure. Since the cases of people forgetting shareholdings in a corporation were increasing, the Govt. realized that the investors are facing huge losses which can be used for their own finances. Therefore, the Govt. decided to establish IEPF. It provides investors a simple solution to claim their dormant shares. All they needed was to apply online for their dormant shares and share their ownership documents to the nodal officer of the company. The rest of the work was to be done by the nodal officer and IEPF authority.
The Government took care of the unclaimed dividend through IEPF authority and thus got rid of the accumulating dormant share problem. Even the companies were regularised and the circle of black money was obliterated. This has obviously brought transparency to the existing system and led to increased trust among investors. With the IEPF rules, investors are rest assured that their valuable money won’t be lost even if they forget about their investment.
Process to Claim Dividends of HUL from IEPF
The process to claim dividends of HUL from IEPF might be a complicated venture. This is specially the case for business owners who don’t have much knowledge about the legalities involved in it. In the following sections, we have tried to explain the process in a simple manner in which even a layman could understand the process. Let us understand the claim procedure in a step by step manner:
- The shareholder is advised to contact the company’s nodal officer and get all the details concerning owned shares and the claim process. The nodal officer will give the investor a list of documents that are submitted with the claim form.
- The investor then needs to file the IEPF claim form by visiting the IEPF website. This can be done by submitting personal details and details regarding ownership of shares.
- After filing the claim form, the claimant should take a printout and compile the copies of necessary documents prescribed on the IEPF website and by the Nodal officer.
- After compilation, the claimant should send the file to the Nodal officer who will verify the detail and documents. He will investigate the ownership of shares and verify the details.
- The nodal officer creates a claim verification report based on the submitted details and sends it within 15 days of receiving to the IEPF Authority fund manager.
- The fund manager after receiving the verification file starts scrutinising it along with the application form and other documents.
- After verification, the fund manager takes one of the following decisions:
- He can ask for additional documents from the claimant through the nodal officer.
- He may reject the application due to any error or missing documents not furnished by the claimant.
- He can sanction the claimed shares or dividends after verification.
To conclude…
So, in this blog we have understood how the shares of the HUL bought in the late seventies could be worth more than crores in today’s values. We have also understood how recovery of these shares could prove immensely profitable for investors. However, the whole process of claiming the shares from the IEPF could take time. This is because the process requires constant liaising with nodal officers and IEPF fund managers. For busy investors this could prove to be a lot of work.
To ease out the process of claiming shares from the IEPF, a claimant can take help from any reputed financial and legal consultancy. These companies have experienced professionals who can help the investors in the recovery of shares in India. The investors can simply provide all the documents and relevant details to them and they will take care of the whole process. They will conduct regular liaising with the nodal officer and IEPF authority till successful transfer of shares.