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.
|Announcement Date||Effective Date||Dividend Type||Dividend (%)||Remarks|
|23-10-2020||04-11-2020||Special||900.00||Rs.18.0000 per share (900%) Special Dividend|
|05-06-2020||05-08-2020||Final||400.00||Rs.8.0000 per share (400%) Final Dividend|
|13-03-2020||24-03-2020||Interim||500.00||Rs.10.0000 per share (500%) First Interim Dividend|
|10-05-2019||24-07-2019||Final||900.00||Rs.18.0000 per share (900%) Dividend|
|28-05-2018||14-08-2018||Final||800.00||Rs.16.0000 per share (800%) Dividend|
|31-05-2017||11-08-2017||Final||700.00||Rs.14.0000 per share (700%) Dividend (Adjusted for Bonus)|
|25-05-2016||18-08-2016||Final||912.50||Rs.18.2500 per share (912.5%) Dividend|
|01-06-2015||01-09-2015||Final||812.50||Rs.16.2500 per share (812.5%) Dividend|
|30-05-2014||13-08-2014||Final||712.50||Rs.14.2500 per share (712.5%) Dividend|
|22-05-2013||13-08-2013||Final||616.50||Rs.18.5000 per share (925%) Dividend (Final dividend of Rs.18.50 per share is pre-bonus dividend). Post bonus Dividend comes out to be Rs.12.33 per share. (Dividend per share taken as Rs. 12.33 per share (616.5%) on the Post bonus capital)|
|14-05-2012||14-08-2012||Final||825.00||Rs.16.50 per share (825%) Dividend|
|29-05-2007||14-08-2007||Final||100.00||Final Dividend of Rs. 2/-.|
|03-07-2007||17-07-2007||Interim||100.00||Special Interim Dividend of Rs. 2/-.|
|27-05-2005||12-08-2005||Final||875.00||Dividend of Rs.17.50 per equity shares of Rs.2/- each.|
|04-06-2004||14-09-2004||Final||800.00||Dividend Rs.16/- per share on equity share of Rs.2/- each.|
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 [email protected]
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.
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.
|Name of Officer||Mr. Prasad Shanbhag|
|Postal address||L&T House, N.M Marg, Ballard Estate, Mumbai – 400001|
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.