Imagine purchasing something for Rs 10 that becomes worth thousands of times more over the decades. A Chandigarh man recently stumbled upon old share certificates of Reliance Industries Limited (RIL) purchased in 1988 for just Rs 10 each. Little did he know that this forgotten investment would transform into a windfall worth approximately Rs 10-Rs 11 lakh today, based on historical stock splits and bonus issues. This extraordinary story isn’t just about luck; it highlights the massive amount of unclaimed financial assets lying dormant across India.
What makes this story particularly relevant is that it’s not an isolated case. According to the Securities and Exchange Board of India (SEBI), the total number of unclaimed shares lying with the Investor Education and Protection Fund Authority (IEPFA) is over 1.1 billion, valued at about Rs 1 trillion, and Rs 5700 crore dividends as of March 2024. That’s a lot of forgotten wealth waiting to be claimed by rightful owners.
Why do securities and dividends go unclaimed?
Behind this staggering amount of unclaimed wealth lies a simple story of everyday forgetfulness. Physical share certificates getting misplaced during moves or buried in family files; investors just forgetting about small investments made years ago; investments of deceased investors are not properly settled as their loved ones are unaware about their financial assets; contact details remain outdated after relocations in many cases; and the shift from physical to electronic holdings leaves many investments in limbo. Add to this the lack of financial literacy, where many Indians simply don’t know how to track old investments or are unaware of succession planning, and you have a perfect recipe for forgotten wealth. Even in today’s digital age, managing multiple investment platforms continues to challenge investors, causing potentially valuable assets to slip through memory and time.
How you can find your unclaimed wealth?
Recognizing the magnitude of unclaimed assets, the Ministry of Corporate Affairs set up the Investor Education and Protection Fund (IEPF) to manage unclaimed dividends and shares. When dividends remain unclaimed for seven consecutive years, both the dividends and associated shares are transferred to the IEPF. It serves as a central repository that allows rightful owners to reclaim their assets while promoting investor awareness and education.
How can you find your unclaimed shares?
By following these steps, you can successfully check if your unclaimed shares were transferred to the IEPF:
Check the IEPFA website: The IEPF has a dedicated search facility at https://iepfa.gov.in/login where you can check if any of your investments have been transferred to the fund due to being unclaimed. Enter your investor details (name, father’s name, folio number) or DP-ID, Client-ID, and account number to search and view results.
Contact the company’s RTA: If you remember investing in a specific company, contact their Registrar and Transfer Agent (RTA). Provide your folio number or DP-ID/Client-ID and request information about any shares transferred to IEPF.
Check with depositories: If you had a demat account, contact your Depository Participant (DP) or check your statements via NSDL or CDSL to trace old holdings.
How to file your claim?
Access the IEPF-5 Form: Visit the IEPF website, then access and fill IEPF-5 form. Submit the completed form on the MCA portal. After submission, you will receive an acknowledgment with a Submit Request Number (SRN). Keep this SRN for future tracking of your form.
Print and gather documents: Print the submitted form along with the acknowledgment. Prepare the original copy of the indemnity bond, a copy of the acknowledgment, the share certificate, and the IEPF Form 5. Include a self-attested copy of your Aadhaar card, bank account details linked with the Aadhaar card for receiving the claim, and your Demat account number.
Submit documents to the Nodal Officer: Send all the above documents to the Nodal Officer (IEPF) of the company in an envelope labeled “Claim for Refund from IEPF Authority.” The Nodal Officer will verify your claim form and submit the claim to the IEPF Authority. Based on the verification report, the IEPF authority will process the refund of unclaimed shares and dividends to your client account.
IEPF authority response: The IEPF authority will respond to the verification report sent by the company within 60 days.
Once your claim is approved, the IEPF authority will transfer the unclaimed shares to your Demat account. You will also receive any accumulated dividends associated with these shares to the bank account linked to your demat account. Be patient, as the process of claiming a refund from IEPF can be lengthy and may take a few months. The company’s Nodal Officer will provide final confirmation when the process is complete.
Dividends:
First let us understand what unclaimed dividends are.
Well, unclaimed dividends are company profit distributions that the shareholder never received, which is often due to outdated contact information or simple oversight. After seven years, companies transfer these funds to the Investor Education and Protection Fund (IEPF), though they can still be claimed even after seven years, through a more complex process.
Now, how can you find your unclaimed dividends?
Check with your stockbroker: Log into your Demat account or contact customer service to look for dividend notices marked “Failure,” “Invalid Address,” or “Unclaimed.”
Search company records and IEPF database: Visit the Ministry of Corporate Affairs (MCA) website’s, go to “IEPF Services” and click on “Search Unclaimed/Unpaid Amount”. You can then search for unclaimed dividends by selecting the company name, and entering your details (PAN, bank account number) to identify any unclaimed amounts.
How to file your claim?
Documentation: Complete E-form IEPF-5 on the MCA portal and gather supporting documents (PAN card copy, active Demat account statement, cancelled cheque, previous dividend payment proofs).
Submit your claim: Authorize a Nodal Officer from NSDL or CDSL to represent your claim and send them your completed IEPF-5 form.
Track your claim: Monitor progress on MCA portal using your Service Request Number (SRN), respond promptly to any verification requests, and await closure notification.
Once your claim is approved, you will receive a closure notice detailing your sanctioned amount and shares. Expect payment within 20-25 days via your chosen method (account credit or cheque). A final confirmation from the Nodal Officer will complete the process, successfully returning your unclaimed assets to you. By following these steps, you can successfully reclaim your unclaimed dividends and shares from the IEPF.
The lesson
Stories of discovery of unclaimed securities and mutual funds serve as a powerful reminder to maintain records of all investments, no matter how small they seem at the time. In today’s digital age, keeping digital records and regularly reviewing your investments can prevent them from becoming forgotten assets.
As India’s investment landscape continues to evolve, taking a few minutes to search for potentially unclaimed assets could lead to your own unexpected financial windfall – just like the man from Chandigarh who found a fortune hiding in plain sight.
