Shares of AXIS Bank LTD. are floating at a price of more than Rs. 700 per share in the market as of Feb 2021. The bank is one of India’s largest private sector banks. With business growing continuously, AXIS bank has taken giant strides in growth over the past two decades. Now, since the inception of IEPF, the bank has started depositing a huge chunk of money to it as it has a lot of dormant shares. 

To those who do have really old shares (count 25 years) of AXIS bank, you have a permanent reason to smile as these shares have now increased to unfathomable values.  In simple words..finding old shares of AXIS and raising a claim for them from IEPF can make you rich instantly. To get answers to all your queries like what is IEPF and how old dormant shares of AXIS are going to make you rich in a short span, stay with us till the end of this piece. The huge no. of shares and dividends transferred by AXIS bank to the IEPF might make some people look through their investment history to find if they have any unclaimed shares left of AXIS or not.

How AXIS Bank Limited Has Grown?

AXIS Bank Limited may be a depository financial institution. The Bank is engaged in providing a variety of banking and financial services, including commercial banking, retail banking, project and company finance, capital finance, insurance, risk capital, and personal equity, investment banking, broking, and treasury products and services. The Bank’s business segments are Retail banking, Wholesale Banking, Treasury, Other banking, life assurance, General insurance et al. . it’s a network of roughly 18,210 branches and automatic teller machines (ATMs). The Bank has approximately 110 Touch Banking branches across over 30 cities. Its international banking is concentrated on providing solutions for the international banking requirements of its Indian corporate clients and leveraging economic corridors between India and therefore the remainder of the planet. The Bank caters to the financial needs of girls entrepreneurs through its Self-Help Group (SHG) program as a neighborhood of its microfinance initiatives.

AXIS Bank is one of India’s finest and leading private-sector financial institutions and was among the firsts to receive approval from the Reserve Bank of India (RBI) to line up a personal sector bank in 1994. The AXIS Bank features a banking network of over 5,480 branches and 14,530+ ATMs spread across 2,800+ cities in the country. AXIS Bank Limited is listed as a private company and has maintained a steady growth rate in the past two decades. It offers various banking and financial services that span commercial and investment banking on the wholesale side and transactional/branch banking on the retail side. It also offers financial services in the segments including Treasury, Wholesale banking, Retail banking,  and Other banking related business. Its Treasury segment primarily comprises net interest earnings from the Bank’s diversified investment portfolio, market lending and borrowings, profits or losses associated with its investment operations, and trading in exchange and derivative contracts. The bank’s Retail Banking segment serves retail customers through its vast network of operational branches across the country and other alternative delivery channels. The bank has brought many modern banking practices into play and boasts an impressive lineup of financial products.

Over its years of operations, the share of the AXIS bank limited has shown tremendous growth leading to the company splitting its stocks twice in the last decade. In this blog, we will understand how the values of a small investment in AXIS could be worth millions as per today’s rates and what is the ideal way for the investor to recover such an amount.

Calculation

• Suppose an investor bought 600 shares of AXIS Bank Ltd. registered under his name in November 1995 at Rs. 4.98.

Now the overall value of the investment is 600 shares x Rs. 4.98 = Rs. 2988.

• Now, the prices of AXIS shares have kept on increasing since 1995 and the company had to announce a stock split on two separate occasions to let the small retail investor gain access to the company’s shares.

• Due to the first stock split in 2011, which was in the ratio 5:1 made the total no. of shares equal to 3000. Each share had an equal value which is 1/5 of the total value of a single stock. This meant that the net value of ownership remained constant and only the no. of shares increased leading to a corresponding decrease in the price of shares in proportion.
• The Bank again split its stock in a ratio of 2:1 to bring the no. of shares to 6000.
• Now the total price of investment as per the rate of February 2021 becomes:

6000 shares x Rs. 734.40 = Rs. 44, 06, 400 (Forty-Four Lakhs Six Thousand and Four Hundred).

Bonus History:

Stock Split:

The above amount is an increase of approximately 514899% which is a humongous increase in just over 25 years. This is enough to show the investors why is it a good idea to go for the recovery of shares of AXIS bank limited?

As you can see, from the above calculations that the AXIS bank shares from two or three decades ago could fetch a huge amount to their investors. The bank has also provided its investors huge dividends and thus, has been a preferred stock for many investors. If we add the returns made through dividends to the amount calculated in the previous section then the corresponding return on the investment will easily cross the mark of one crore rupees. These huge figures should be enough to indicate that old shares of AXIS are nothing but a hidden treasure. In the next sections, we have given the data of dividends released by the company in the last two decades from where investors could easily calculate the net dividends offered by the company. We will also understand about IEPF and how to claim old shares of AXIS from it.

Dividend History of AXIS Bank LTD.

The following table will give a detailed account of dividends released by AXIS since 1997. One can simply study the table and do a detailed analysis of how much dividend any investment after 1997 would have generated.

As per the annual report of the AXIS bank in 2018-19 the bank has transferred a whopping 414423 shares to the IEPF fund operating under the Ministry of Corporate Affairs as per the provisions of IEPF Rules 2016. As per the report, the shares were transferred to the IEPF bearing Demat account no 12047200 13676780 opened with Central Depository Services Limited (CDSL) with a Depository Participant in SBI CAP Securities Ltd. as per the said provisions of the IEPF Authority rules all the benefits and returns gained for the shares will be transferred to the IEPF. The report also stated that the IEPF has transferred a total of 4685 shares for claims associated with old AXIS shares by 31 march 2019.

Under the IEPF rules, the company is obliged to release the details of shareholders whose shares have been transferred to the authority under the rules. The company releases the dates of transfer for the dividends and also the last date to claim them before they get deposited into the IEPF fund. One can the following table to get the details for the subsequent financial years and the last date to claim funds before they get transferred to IEPF.

Dates for Unclaimed Dividend Transfer to IEPF

Unclaimed dividends declared by the AXIS banks for the fiscal year 2013 were transferred to the IEPF account on June 26, 2020. Similarly, for the financial year 2014, the associated dividends will be transferred this year on June 24. If the shareholders want to claim their money before the deadline ends then they must reach the nodal officer or transfer agent of the bank to claim the amount from their special account made for unclaimed dividends.  The shareholders can reach the nodal officer with the requisite set of documents to prove the ownership of shares and the dividends. Here are the details of the Nodal officer of the company.

Mr. Dhanjit Thaivalappil (Nodal Officer)

Tel: +91-022-3976 0012 / 0003 / 0016

Email: Shareholder.grievances@AXISbank.com 

An investor can check the status of their unclaimed dividend of AXIS bank LTD. and associated returns on the following link:

Investor Education and Protection Fund – An Overview

The Government of India has set a target of making India a 5 trillion dollar economy before 2024 and for achieving this target it has continued to come up with reforms in the financial and other economic sectors. Be it the IBC 2016 or banking reforms the government has been taking steps in the direction to make the Indian financial sector more formal and organized. The introduction of the IEPF or Investor Education and Protection Fund in 2016 was also one such major reformist step. From the earlier time of Independence, the Indian stock market had no regulations or a statutory body that could oversee the issue of unclaimed dividends.

In 2016, the Govt. founded the IEPF authority and came up with the regulations associated with it. The regulations were read with the Companies act 2013 and thus made it mandatory for every listed company to follow them. Here are basic changes suggested by the IEPF rules and the subsequent amendments related to the transfer of unclaimed dividends to the IEPF account.

• An investor must claim his/her dividends from the company within 30 days of its declaration.
• The companies were asked to create a separate unclaimed dividend account where the dividends need to be transferred in case they have not been claimed by the investors within 30 days.
• If the investor wants to claim the amount from the special account after 30 days then he/she must reach the company’s transfer officer or nodal officer with the prescribed set of documents to raise the claim.
• The company should inform the shareholders that their dividends have been transferred to the unclaimed dividend accounts and they must claim it before it gets transferred to the IEPF.
• The company will be obliged to publish the list of investors whose dividends have been transferred to the unclaimed dividend account.
• The company should communicate the information regarding dividend transfers individually to the shareholders via email and letters.
• If the investor fails to claim the dividends from the company’s unclaimed dividend account for 7 years after the transfer then the dividends must be transferred to IEPF.
• The company should release the list of shareholders every year whose shares have been transferred to the IEPF.
• After seven years, the shareholder must make the application to IEPF to get the dividends.

With these rules, MCA aimed to streamline the process of claiming the dividends which are dormant. The whole process became more regularised and transparent. The process to claim dividends from IEPF is also fairly organized and goes through a lot of scrutinies to ensure that the dividends go into the right hands and are free of any fraudulent claim.

Process to Claim Dividends of AXIS Bank from IEPF

The process to claim dividends from IEPF might sound a bit complex as there are a lot of documents and know-how involved. Here we have tried to explain the process in simple steps so that even a layman can understand the basics of the IEPF claim process. Here are the basic steps to claim dividends from IEPF.

1. The shareholder is advised to get in contact with the company’s nodal officer and get all the details regarding his owned shares and the related claim process.  The nodal office will also give the investor the list of documents that need to be submitted with the claim form.
2. The shareholder then needs to visit the website of IEPF and file the IEPF claim form on it by submitting his personal details and details regarding his/her ownership of shares.
3. After filing the form, the claimant must take a printout of the 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 form and documents to investigate the ownership of the claimant on the shares and verify the details as per the documents submitted.
5. The nodal officer will create a claim verification report based on the claim file and send it within 15 days of receiving it to the IEPF Authority’s regional fund manager.
6. The fund manager after receiving the file will scrutinize the claim verification report along with the application form and the copies of other documents.
7. After thorough verification, the fund manager may take any of the following three actions.
8. He can ask for some additional documents from the claimant which should be sent by him/her through the nodal officer.
9. He may reject the application due to some error in the application or missing documents that were not furnished on time.
10. He can sanction the claimed amount after successful scrutinization of the claim file.

Necessity of Legal Help to Claim AXIS’s Old Shares

You might have noticed in the previous sections that thorough scrutiny of the claim form is conducted by Nodal officers as well as the IEPF authority. This is done to ensure that there is zero chance of any fraudulent claim. The ownership documents of shares are thoroughly scrutinized and background checked. Also, the application form is verified thoroughly and even small errors need to be rectified in time or failure to do so could lead to cancellation of a claim.

All these reasons lead to making the claim process a bit time-consuming and tedious for a common investor. To save yourself from the hassle 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 forms and thus chances of any error in your application will be reduced to none. Also, most of these firms offer end-to-end support and liaising with the nodal officer and IEPF authority in case of any missing documents or other issues with the application. This saves a lot of hassle for the investor. The final and most important help comes in form of getting ownership approval in case the shares are inherited from an elder relative who forgot to name an heir to the shares. The legal firms help the client in proving ownership and legitimate right over the shares so that the claim process is easy.

To conclude…

All the above reasons prove that recovery of AXIS shares is indeed a profitable option for the investors and they must look into the investment portfolio of their Fathers and Grand-Fathers to look for any dormant shares of AXIS Bank LTD. The investors can simply hire a legal consultancy firm and hand over the job of claiming money/ dividends from IEPF on behalf of the claimant. This will not only make the job easier but also decrease the turnaround time for the overall claim process.

All of this might as well take a while if you try to complete all the processes on your own. Also with the rising scrutiny when it comes to shares owned by the heirs has made it a bit difficult to claim ownership for the kin of the investors. Therefore, always have a knowledgeable attorney by your side while filing the claims for such investments to stay away from any such issue.

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Can you believe that shares of a company can provide a return of almost 3700%?

Yes, you read it right. This unbelievable milestone is achieved by Larson and Toubro Ltd. It has provided a return of 3700% to its shareholders. In January 1995, the shares of Larson and Toubro were floating at a price of ₹ 35 per share on the stock exchange. As of December 2020, the share price is more than ₹ 1288 per share. This simply means that if you had bought 500 shares of Larson and Toubro in 1995, then the current value of those shares would be in Crores.

Introduction to the Company

Larsen & Toubro Limited is a firm specializing in engineering, technology, construction, financial, and manufacturing services. The Company’s other segments include Infrastructure, which encompasses engineering and construction of the new buildings, factories, transportation-related infrastructure, or heavyweight civil infrastructure. It offers Power station solutions for gas-based and coal-based thermal power plants and Heavy Machinery Engineering where it manufactures, and supplies engineered critical equipment and systems. Defense Engineering is also one sector where it is engaged in designing, development, multi-level production and support of kit, systems and platforms of defense and aerospace engineering sectors.

Other additional works include communication projects (including military communications), marketing and servicing of construction and mining machinery and parts thereof, hydrocarbon, and manufacture and sale of rubber processing machinery. The Defense Engineering segment is additionally involved in designing, constructing, and repairing Defense vessels.

Even during the grim times of the COVID-19 pandemic, it continued to generate profits which led to its share price keep on increasing. The company has been quite generous over the years in providing bonus shares to its investors and also provides healthy dividends.

P.S.: This information regarding the bonus shares is based on the history of the company in the stock market and is based on the data from 2001 onwards.

The company declared heavy dividends of up to 500% per share in 2020. The first interim dividend released by the company in March 2020 is Rs. 10000 per share. The equity dividends declared by the company in past 12 months are Rs 36 per share.

Calculation related Shares bought for L&T in 1995

• Suppose you bought shares of Larson and Toubro Ltd. in January 1995 for ₹ 21, 500.
• The share price per share in 1995 for L&T was Rs. 43. The No. of shares you could have bought in Rs. 21, 500 = Rs. 21, 500/ Rs. 43 = 500.
• Thus, you would have purchased 500 shares.
• In 2006, the company issued bonus shares in the ratio of 1:1.

[Bonus Shares are the shares issued by a company for its shareholders as fully paid up shares without receiving any money (as a bonus) for their shareholders. In other words, the corporate houses, give a gift to their shareholders for their long-term association by issuing bonus shares].

Issue of bonus shares at a 1:1 ratio means, that for every share owned by an investor, the share company issues another share in the investors’ name. This means that if you had 500 shares, in 1995, then it would have become 1000 shares, i.e., double the initial number of shares.

• The company again issued bonus shares in the ratio 1:1 in 2008. This means the total no. of shares became 2000 in the year 2008.
• The company continued being generous to its investors in 2013 and issued bonus shares in the ratio 1:2. This meant the new shares will increase and become 3000.
• The latest gift for L&T investors came in the year 2017 when it issued shares in the ratio of 1:2. This took the total no. of shares to 4500.
• Now, the price of 1 share of Larson and Toubro Ltd. as of February 2020, is Rs. 1521. The value of your shares as of date will become,

₹ 4, 500 x 1521 shares = ₹ 68,44, 500 (Sixty eight lakhs forty four thousand five hundred rupees).

• The above amount is only calculated for the price of the shares. We have not calculated the dividends corresponding to the shares that you would have received so far.
• As we have stated, the dividend is huge for investors if they invest in L&T. therefore the corresponding total amount for a mere Rs. 21500 invested in the company would have easily been more than One Crore.
• You can calculate the dividend corresponding to the investment from the table given below.

Source: Dion Global Solutions Limited

So, if you had just invested ₹ 21500 years ago, in the shares of Larson and Toubro Ltd., then you would have become a Crorepati today. Now, suppose you have forgotten about your investment in these shares and therefore, have not claimed dividends related to them for the past 26 years. If that is the case, then do not think that you cannot get possession of these shares anymore, even though you are the rightful owner of the same.

The said shares have now been transferred to the IEPF regulated by the Government. As per the Government’s guidelines, such shares will now be treated as dormant shares because no one has claimed dividends for them for more than seven years. Since the shares have unclaimed dividends, they are now in the possession of the Government of India under their Investor Education and Protection Fund (IEPF) Authority. The Government introduced this in 2016 to resolve the problem of such ‘long lost and forgotten shares’ which were unclaimed for decades.

What is Investor Education and Protection Fund?

As stated above, the govt introduced the IEPF to deal with the ever-increasing problem of individuals forgetting their shareholdings during a company. The IEPF was launched to market the protection of interest, and awareness of the investors. The unclaimed dividend and lost shares transferred to the present account are taken care of by the govt on behalf of the rightful shareholders. The dividends on the shares remain unclaimed for years because people tend to forget that they own the shares within the first place. There are multiple reasons why people ditch their ownership during a company:

• If an investor is a senior citizen, they tend to forget to appoint a nominee for their shares before their death. Therefore, the heirs remain clueless about their ownership of such shares, and therefore the shares remain dormant.
• A small amount makes investors forgetful of their investment.
• Shares get stuck in the court’s proceedings due to any family dispute and thus remain unclaimed till the court’s proceedings are over.

There could be other reasons for an investor to forget about his/ her shareholding in the company. This is often the rationale why many companies have abundant shares with them with no sign of ownership.

Before the introduction of the IEPF, the businesses were required to transfer the unclaimed dividends and unclaimed shares to the govt funds which were employed by the govt under various public welfare schemes and for various developmental works. When the govt saw that it had been a really big loss for the investors, then the govt decided to line up the IEPF.

It’s a platform provided to the investors where they will approach the govt to say their dividends and ask them to refund their long-forgotten shares. Investors can claim their dividends/shares from the IEPF authority’s fund manager by applying for it to the managing authority. Due to the established authority of IEPF, people can claim their dividends and shares of various companies through one platform rather than getting to each company individually.

Authority for Governing IEPF

Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 are applicable to the functioning of the IEPF. These laws state that the shareholders get 30 days to say the dividend after it gets declared by the corporate. If the dividends remain unclaimed by the shareholders, then the corporate must transfer such dividends to a special account, opened within the name of the corporate, called ‘Unpaid Dividend Account’.

The company has got to publish an inventory of all the shareholders along side their unclaimed dividend on its website within 90 days of transferring the quantity to the ‘Unpaid Dividend Account’. Once the quantity reaches the ‘Unpaid Dividend Account’, the shareholders need to file an application to the agency of the corporate to say the payment of the unclaimed dividends. If the shareholder fails to say the quantity for 7 years or more thanks to the above-mentioned reasons or the other reason, then the corporate is required to transfer the unclaimed dividend to the IEPF. Since the dividend remains unclaimed for quite 7 years, the shares also are considered as forgotten. Thus, they’re also transferred within the name of the IEPF along side their dividends.

Note: The shares which are transferred within the name of the IEPF are those on which the dividend has been declared by the corporate, and therefore the shareholders have did not claim an equivalent for a consecutive period of seven years.

Dividends of Larson and Toubro Ltd. in IEPF

The Annual Reports of a corporate state the present status of the dividends and shares of the corporate which is transferred to the IEPF account. In consistency with the Annual Report, 2019-2020 of Larson and Toubro Ltd., a sum of RS. 24,34,13,796 was transferred to the fund. As mentioned above, before the IEPF was introduced, the unclaimed funds used to get transferred to the Central Government and it was used in public welfare schemes. The unclaimed shares/dividends were transferred to the IEPF in the perusal of Companies Act 2013 Section 124 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 for the shareholders who did not claim their dividends for quite 7 years.

Unclaimed dividends declared by the corporate for the fiscal year were Rs. 3,93,12,966 and were transferred to the IEPF in 2020. The deadline to say the dividends for the fiscal year 2014-2015 is going to be given during this year’s annual financial report release.

An investor can check the status of their unclaimed dividend, declared by Larson and Toubro Limited, from https://investors.larsentoubro.com/Unclaimed_Dividend.aspx

For more information, they can visit https://investors.larsentoubro.com/Resources.aspx

Shares of L&T Transferred to the IEPF

In accordance with the norms of Rule 6(3)(a) of the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘IEPF Rules’) and Section 124(6) of the Companies Act, 2013 the Company has transferred 3,634 equity shares of Rs. 2 each (0.0003% of total no. of shares) held by 257 shareholders (0.024% of total shareholders) to IEPF.

As we can see, the number of unclaimed shares of L&T transferred to the IEPF authority account worth crores. The company has a big chunk of unclaimed dividends in the IEPF. The shareholders are advised to recheck their complete investment history, or they can look for ownership of shares passed on from any deceased family member and claim dividends on their behalf from IEPF.

Unclaimed Shares Transferred to IEPF by L&T

What happens to the unclaimed shares and therefore the associated dividend transferred to the IEPF? Do investors lose all of their rights over your dividend income alongside the shares?

As stated in the IEPF rules, a shareholder won’t lose the rights over the dividend amount and therefore the shares once they were transferred to the govt funds. However, with the introduction of IEPF, a shareholder retains his/ her right over the dividend amount also because of the shares were transferred to the IEPF Account. All one must get to do is apply to the fund manager of the IEPF. Nonetheless, Larson and Toubro Ltd. still sends letters individually through posts and other modes of communication, to make their shareholders conscious of their holdings within the company and ask them to lay timely claims for their dividends. Once the dividends, holding the shares, get transferred to the IEPF, then it becomes a touch difficult for the shareholders to recover their shares.

This is often because the procedure followed by the fund manager, to refund the dividend amounts and therefore the shares, is time-consuming. To ensure that the refund of shares goes to its rightful owner, they complete thorough scrutinization of all the applications before initiating the transfer of the quantity of raised claim and therefore the shares. This is often the rationale behind Larson and Toubro Ltd. advising its shareholders to get the dividend from the corporate itself because it takes less time, and it’s a simple process. The shareholders can apply to the Company’s Registrar or the agency to say the dividends. However, if your shares are already transferred to the IEPF, then you’ll approach the Nodal Officer of the corporate, appointed during this regard. To contact the Nodal Officer of Larson and Toubro Ltd., write an email to Prasad.Shanbhag@Larsontoubro.com 

The Necessity of Legal Help?

The application procedure to lay the claim for refund of unclaimed dividends/lost shares from the IEPF Authority may be a tedious process. It requires a particular degree of legal and financial knowledge. If you hire a legal expert, then you’ll easily circumvent this headache as your legal consultant will take you out of this. He also will make sure that the appliance contains no mistakes to avoid rejection from the IEPF Authority. The expert will do all the tedious tasks for you; from collecting the data from the corporate about the dividends and shares to collecting the specified documents to filing the said application.

If your shares are involved in any family dispute, then the consultant will come in handy to resolve such issues. As stated above, it’s common for a shareholder to die before appointing any nominee. In such a case, the various relatives of the deceased could come to raise claims on all associated property of the deceased which incorporates the shares he bought in his lifetime. Nobody wants to let go of the shares of Larson and Toubro Ltd. And when there are numerous claiming members from a huge family, then there’s always going to be a dispute. A legal professional or a legal firm will assist you to manage all such disputes associated with the ownership of the shares. A lawyer knows all the laws and nitty-gritty of the loopholes around the distribution of the family assets; therefore, he can provide you with the simplest deal possible.

To Summarize…

As we’ve seen, Larson and Toubro Ltd. have given dividends of up to 500% per share to their shareholders over the years. Thanks to this ever-increasing, non-stop growth of the share price, ₹ 21500 invested within the shares of Larson and Toubro Ltd. in 1995 are worth well ahead of ₹ 1 Crore today. The current times are perhaps the best time to lay claim and sell these shares because it can assist an investor in dealing with the financial difficulties arising due to the dim scenario of the pandemic.

Thus, if you only came to understand the existence of such shares in your name, which was left to you by your deceased loved one, then it’s the perfect time to redeem the lost shares. you’ll also receive the dividend associated with them accumulated over the period. An unexpected gift of crores of rupees is just like hitting a jackpot. It is advised that an investor must inspect the links given above which will take you to the specified section of the company’s website. The perspective claimant should gather information regarding your dividends accumulated thus far, alongside the shareholding within the company, and file an application to lay a claim on their dividend from Larson and Toubro Ltd.

You’ll need to apply to the Nodal Officer of the corporate, by contacting them. You can find the details of the officer on the following link.

http://investors.larsentoubro.com/upload/ListingCompliance/Letter%20for%20Intimation%20of%20Nodal%20Officer%20under%20IEPF.pdf

However, if your dividend amount and shares are already transferred to the IEPF, then you’ll need to file your application through the fund manager of the IEPF. For this, we will recommend you to seek out an expert legal consultant/legal firm as soon as possible and apply to the IEPF Authority for the refund of the unclaimed dividend and therefore the recovery of the transferred shares. A legal expert also will assist you to fight for the shares stuck during a family dispute.

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Do you think 50 shares of a company can make you a Crorepati? No, it is not a con advertisement you find on the internet these days. It is legit. If you or your ancestors have bought 50 shares of Asian Paints Ltd. before 1985, then the value of those shares in today’s date is worth almost ₹ 2 Crores.

History of the Company

Asian Paints Ltd. is currently India’s No. 1 and Asia’s No. 3 paint manufacturing company. It was incorporated in 1945 as a private company. The company went public in 1982 and got listed on the Stock Exchange. The company performed tremendously so much so that its per-share price reached more than ₹ 5, 000. Due to this high value, it had become difficult for retail shareholders to invest in the company. Therefore, in 2013, the company decided to split its stock into 10 shares. Thus, each new share was worth ₹ 500 each. From there also, the stock price has reached the price of more than ₹ 2, 100 per share now. The company is India’s leading paint company with the group turnover of ₹ 202.1 Billion. The company operates in 15 countries with 26 paint manufacturing facilities in the world, which serves consumers in over 60 countries.

Even during the setback of the COVID-19 pandemic, it continued to generate profits and provide dividends to its investors. For the first three quarters of the year 2020-21, the shares of Asian Paints Ltd. have provided an aggregated dividend of ₹ 12 per share to its shareholders. So, if there are 50 shares in your name, bought before 1985, then you would have received a dividend of ₹ 1, 10, 520 in the first three quarters of this year alone.

It is alright to be confused at this stage as to how ₹ 12 per share for 50 shares gives a dividend of ₹ 1, 10, 520. It should have yielded an income of only ₹ 600. This would have been the case if the company were not generous enough to issue huge amounts of bonus shares to its shareholders. You heard it right! Asian Paints Ltd. has issued a huge amount of bonus shares to its shareholders. The following calculation will illustrate how the 50 shares yielded the dividend of ₹ 1, 10, 520, and how they are worth almost ₹ 2 Crore today.

Calculation

• Suppose you bought 50 shares of Asian Paints in 1982.
• In 1985, the company issued bonus shares in the ratio of 3:5.

[Bonus Shares are issued by the company to its shareholders as fully paid up shares without any cost. In other words, the company by issuing bonus shares gives a gift to its shareholders].

Issuing bonus shares at a 3:5 ratio means, that for every 5 shares owned by a shareholder, the company will issue another 3 shares in his name. This means that if you had 50 shares in the beginning, it has now become 80 shares, i.e., 50 shares + 30 Bonus Shares.

• In 1987, the company again issued the bonus shares in the ratio of 1:2. Now, for every 2 shares a shareholder-owned, the company issued another share. Therefore, the 80 shares in your name have now become 120 shares.
• In 1992, the company again issued bonus shares at a 3:5 ratio. Now, your number of shares has increased from 120 to 192 shares (120 shares + 72 Bonus Shares).
• In 1996, the company issued bonus shares at a 1:1 ratio. Now your shares are doubled in the amount. Thus, it has increased to 384 shares.
• In 2000, the company issued another round of bonus shares at the ratio of 3:5. This means that the shareholder holding 384 shares will now receive 230 shares more. This makes the total number of shares, held by the shareholder in 2000, to be 614.

P.S.: The calculation shows the exact number to be 230.4, but since shares cannot exist in fractions, we have rounded off the number to 230 shares.

• After the 3 years, in 2003, the company again issued the bonus shares at the ratio of 1:2. The shareholding of every shareholder increased by 50%. This led to an increase in shares from 614 to 921.
• 10 years down the line, the company, in 2013, due to an extreme rise in its share price, split up its stock in the ratio of 1:10.

[A company splits its stock when the share price of the share increases to a great extent and it becomes difficult for the retail investors or small investors to invest in the shares of such companies. By splitting the stocks, the company increases the number of shares in the market while decreasing its price by the same proportion. In this way, there is no change in the net value of the market capital.]

The same thing happened with Asian Paints Ltd. Its stock price skyrocketed and was trading at the price range of ₹ 4, 500 to ₹ 5, 000 per share. It was becoming difficult for retail investors to buy the company’s stocks. Therefore, Asian Paints Ltd. did the stock split at the ratio of 1:10. This means that for every share, the shareholder got 10 shares, worth 1/10^th of the original 1 share. This means that, earlier, if you had 10 shares of ₹ 5, 000 each, then now you have 100 shares of ₹ 500 each. Thus, no change in the net value of the shares worth ₹ 50, 000.

Due to the stock split, now your shares increased from 921 to 9, 210.

P.S.: Do not confuse it with Bonus Shares. Because unlike Stock Spilt, the price per share does not decrease while issuing Bonus Shares.

• Now, the price of 1 share of Asian Paints Ltd., as of 19^th November 2020, is ₹ 2, 160. Thus, the value of your shares as of date is,

₹ 2, 160 x 9, 210 shares = ₹ 1, 98, 93, 600 (One Crore Ninety-Eight Lakhs Ninety-Three Thousand Six Hundred)

• The above amount is only the price of the shares. We have not calculated the dividends that you have received so far.
• Asian Paints is known for paying its investors generously. To date, the company has paid an aggregate dividend of ₹ 245.75 per share.

Source: https://www.asianpaints.com/content/dam/asianpaints/website/secondary-navigation/investors/stock-quotes/Dividend%20Payout%20History.pdf

Now you can calculate your dividends accordingly.

So, if you had invested ₹ 1, 150 in the shares of Asian Paints Ltd. in 1982, then you would have become a Millionaire today. Now the issue is that you are not in the possession of the shares of Asian Paints Ltd., though you know that you are the rightful owner of the same. As per the Government’s rule, these shares are now treated as forgotten shares because no one has claimed dividends for seven years or more. Since the dividend remained unclaimed, the shares are now in the possession of the Government of India under the Investor Education and Protection Fund (“IEPF”). It was introduced in 2016 by the Government to resolve the issue of such ‘long lost and forgotten shares’.

About Investor Education and Protection Fund

As stated above, IEPF was introduced by the Government to take care of the unclaimed dividend and unclaimed shares on behalf of the rightful shareholders. People usually forget that they own shares in a company which is the reason why the dividends on such shares remain unclaimed for years. The reason to forget about the existence of the shares can be any of the following:

• Investors tend to forget to appoint a nominee for their shares. After their death, their heirs remain clueless about their ownership of such shares, and the shares remain deserted.
• The amount of investment is so small that the investor forgets about it.
• Shares become a part of the property dispute and remain without ownerless till the verdict of the court.

There could be some other reasons also that could lead to investors forgetting about the shares. Due to this, many companies have shares that lie with them without any sign of ownership.

Before the introduction of the IEPF, such unclaimed dividends and unclaimed shares were transferred to the government funds which were used by the government for various public welfare schemes and developmental works. When the people started claiming their dividends and asked to refund their shares, the government decided to set up IEPF. It is a medium that provides the public to approach it and claim their dividends and ask to refund their long-forgotten shares. They can claim their dividends and shares by applying to the managing authority of the fund manager. Due to the establishment of IEPF, people do not need to approach separate companies to procure their dividends and shares.

Laws Governing IEPF

Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 govern the functioning of the IEPF. These laws state that after a company declares its dividend, the shareholders get 30 days to claim the dividend. If the shareholders fail to claim, then the company is forced to transfer such unclaimed dividend to a special account, opened in the name of the company, called ‘Unpaid Dividend Account’.

The company, within 90 days of transferring the amount to the ‘Unpaid Dividend Account’, has to publish a list of all the shareholders along with their unclaimed dividend on their website. After that, a shareholder has to file an application of claim to the company for the payment of the unclaimed dividend. If the dividends remain unclaimed for a consecutive period of 7 years, then the company is obliged to transfer the unclaimed dividend to the IEPF. Once the 7-year time period gets over, the shares also get transferred to the IEPF, along with the dividend amount.

Note: The shares transferred in the name of the IEPF are the shares on which the dividend has been declared by the company, but the shareholder has failed to claim the same for a consecutive period of 7 years.

Unclaimed Dividend & Unclaimed Shares of TCS

We can see the transfer status of the unclaimed dividend and unclaimed shares to the IEPF from the Annual Reports of a company.

Funds & Shares transferred to the IEPF

According to the Annual Report 2019-2020 of the company, Asian Paints has transferred the following unpaid dividend and unclaimed shares to the IEPF during the Financial Year of 2020:

Source: https://www.asianpaints.com/content/dam/asianpaints/website/secondary-navigation/investors/stock-quotes/Dividend%20Payout%20History.pdf

The company in the previous financial year has transferred One Crore Sixty-Six Thousand Nine Hundred Ninety-Three Rupees (₹ 1,00,66,993/-) of the unclaimed dividend, along with Eighty-Four Thousand Two Hundred Thirty (84,230) shares in the IEPF. It might seem that the unclaimed dividend transferred to the IEPF account is not much as compared to the other companies. But the number of unclaimed shares transferred to the IEPF account worth crores. The company has a huge chunk of unclaimed shares in the IEPF. The shareholders are advised to look into their investment history, or the ownership of shares passed on from a deceased family member and claim their dividends and shares from IEPF.

Funds & Shares to be transferred to the IEPF

The Annual Report 2019-2020 also provides the dates by which an investor can approach the Company’s Registrar or the Transfer Agent to claim dividends declared by the company. It also provides the amount of outstanding unclaimed dividends. After the expiry of the stated dates, Asian Paints Ltd. will be forced to transfer the outstanding amounts of dividends, along with the shares, to the IEPF. 

The following table provides the information regarding the amount of dividend issued and the last dates by which the shareholders can claim those dividends.

For shareholders of Asian Paints Ltd.:

The table above provides the deadlines to the shareholders of Asian Paints Ltd., to claim their dividends by applying to the Company’s Registrar or the Transfer Agent. After the due dates, provided in the 4^th column, Asian Paints Ltd. will be forced to transfer the dividend funds (provided in the 3^rd column) to the IEPF, along with the respective shares.

Funds & Shares transferred to the Asian Paints Limited – Unclaimed Suspense Account

The company has disclosed the details of the equity shares in ‘Asian Paints Limited – Unclaimed Suspense Account’ as per the requirements of the Regulations 34 and 39 read with Schedule V (F) of the Listing Regulations. According to the information provided in the above table, Six Lakhs Twenty-Two Thousand Four Hundred Twenty (6,22,420) shares are still pending in the ‘Unclaimed Suspense Account’ of the Company and the shareholders have time to claim them before it gets transferred to the IEPF account.

An investor can check the status of their unclaimed dividend, declared by Asian Paints Ltd., from https://www.asianpaints.com/more/investors/unclaimed-dividend.html

Unclaimed Shares & Lost Dividend under IEPF

What happens to the shares and the dividend transferred to the IEPF? Will you lose all your dividend income along with your shares?

A shareholder, before the introduction of IEPF, used to lose his rights over the dividend amount and the shares once they were transferred to the Government funds. But now, with the introduction of IEPF, a shareholder does not lose his/ her right over the dividend and the shares. However, companies still urge their shareholders to claim their dividends before the shares go into IEPF. The reason behind this is that the procedure of claiming the refund of dividend and the shares from IEPF is very time-consuming. IEPF takes a longer time to refund the amount and shares to the rightful owner because it wants to be 100% sure that the dividend and shares are given to the rightful owners only. Due to this, they carefully scrutinize the applications before giving their approval of the transfer. This is why Asian Paints Ltd. advises their investors to claim their dividend from the company by applying to the Company’s Registrar or the Transfer Agent, rather than claiming the refund of shares and the dividend amount from the IEPF. For this purpose, the Nodal Officer, appointed by the company under the rules of IEPF, is Mr. R. J. Jeyamurugan, CFO and Company Secretary. Mrs. Radhika Shah, Chief Manager- Secretarial & Legal, has been appointed as the Deputy Nodal Officer.

Why do You Need Legal Help?

The procedure to file an application for the refund of unclaimed dividends and lost shares to the IEPF Authority is a tricky and tedious task. Hiring a legal expert will ease out your process of filing the application. The application filing requires a certain degree of technical knowledge. The legal expert will ensure that the application contains no mistakes and thus, avoids the chances of it getting rejected. He will do all the tasks; from collecting the information from the company about the dividend and shares to filing the said application.

The legal expert can also help you to get your shares that are involved in a family dispute. As stated above, when a shareholder dies without appointing a nominee for its shares or does not draft a will as to what will happen to its shares after his death, then all the relatives of the deceased shareholder come to claim their share in the deceased’s property, a.k.a., shares in this case. I mean who will leave the shares of Asian Paints Ltd. worth ₹ 2 Crores. No one, right! No family member of a deceased person will want to let go of the shares of Asian Paints Ltd. that were bought by him before 1985. Due to these reasons, a claimant requires the help of a legal professional or a legal firm to manage all such disputes related to ownership of the shares. A legal expert knows all the laws and nitty-gritty around the loopholes regarding the partition of the family assets, therefore, he can provide you with the best deal possible.

Conclusion…

As we have seen, Asian Paints is very generous in issuing bonus shares to its shareholders from time to time. Due to this generosity, the 50 shares bought before 1985 are now 9,210 shares in number. And as we know, the value of the shares has increased manifold. Thus, if you just came to know about the existence of such shares in your name, then it is the best time to redeem them, along with the dividend accumulated over time. ₹ 2 Crores, out of the blue is nothing less than winning a lottery. It is advised that you check the tables provided above and find the expiry date by which you can claim the dividend from Asian Paints Ltd. If not already transferred into the IEPF, then apply for the dividend claim as soon asiaas possible. You will have to apply to the Nodal/ Deputy Nodal Officer of the Company, i.e., Mr. R. J. Jeyamurugan, CFO and Company Secretary, and Mrs. Radhika Shah, Chief Manager- Secretarial & Legal, respectively. However, if your dividend amount and shares are already transferred to the IEPF, then find a legal expert as soon as possible, and apply to the IEPF Authority for the refund of the unclaimed dividend and the recovery of the transferred shares. Hiring a legal expert will also help you to fight for the shares stuck in a legal dispute.

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