Dormant shares have become a common thing in the Indian financial market. This is especially true for companies who are operating for decades and had their IPO released in the 70s or 80s. Now, even a small amount invested in these firms at that time could value a lot more in these times. This is especially true for firms like Eicher motors whose shares had a low value for most of their business history but have grown leaps and bounds in the last two decades due to the resurgence of their top brand Royal Enfield.
Financial History of the Company
The came into being in 1982 and since then the Eicher Motors has seen both highs and lows in the business world. However, since the resurgence of its iconic Royal Enfield Motorcycles, it has taken the automobile sector by storm. As per its annual reports of the last financial year, the company has a market capitalisation of Rs. 69254.03 Crores. The company is one of the leading manufacturers of motorcycles and spare parts of Royal Enfield brand vehicles. Other than motorcycles, it also manufactures tractors for the Agri business. The distribution network of the company is spread worldwide, and the brand has become quite popular.
The company got listed on the stock exchange in 1982 and grew slowly in its initial few years of operations. This was also the reason why many people invested small amounts in the company but forgot about them thinking that it might never grow to give any significant return. However, the company grew tremendously and as per the data of February 2021, its single share was trading at Rs. 2,498.60 compared to a price of Rs, 2.33 in 1996. The average annual growth of the company has been set at 32% which is massive compared to its counterparts. In the following section, we will do some calculation based on a hypothetical investment made in the company in 1996 to demonstrate how a small amount invested in the company at that time would have made an investor a crorepati today.
In November 1996, Eicher Motors’s shares were trading at Rs. 2.33 per share.
Suppose an investor bought 500 of these low-value shares at a meagre price of Rs. 1165.
The company has managed to be on a great growth path and due to which its share prices rose exponentially. This led to the shares becoming too expensive to buy for small retail investors.
To tackle this issue the company came up with a stock split in the ratio 1:10. This led to every share breaking into 10 shares of equal value whose combined value was the same as that of 1 share before split. This led to the net valuation of the shares remaining the same but the no. of shares rising at a smaller price.
Due to the split, the no. of Eicher shares with the investor would have become 5000.
The growth in the price of shares didn’t stop as even after the split the shares have continued trading at a higher price of Rs. 2,498.60 as of February 2021.
If we calculate the corresponding value of shares in today’s price, then the net value of shares will become:
5000 shares x Rs. 2498.60 = 1,24,93,000 (One Crore Twenty Four Lakhs Ninety Three Thousand)
The above data doesn’t consider the amount of dividend released for the owned shares by Eicher Motors in the last two decades. If one considers that data too, then the net returns on the shares will be even bigger. What this indicates is that if someone has even s small investment in Eicher before the year 2000, then the value of such investment in today’s terms would make the investor rich overnight. In the following sections, we will explore some data related to dividends released by Eicher Motors Limited and the unclaimed dividend information released by it in the annual financial report. After that, we will move on to understand how to claim dividends from IEPF.
Dividend History of Eicher Motors Limited
The following table gives an year by year overview of the dividend released by the company in the past twenty years.
Rs.125.0000 per share (1250%) Interim Dividend
Rs.125.0000 per share (1250%) Dividend
Rs.110.0000 per share (1100%) Dividend
Rs.100.0000 per share (1000%) Dividend.
Rs.100.0000 per share (1000%) Interim Dividend
Rs.50.0000 per share (500%) Dividend (BC has been Revised from 19/03/2015 to 26/03/2015)
Rs.30.0000 per share (300%) Dividend
Rs.20.0000 per share (200%) Dividend
290% Dividend (250% one time special dividend + 40% Interim Dividend)
Details of unclaimed shares in Suspense Accounts as per its Annual financial report of 2019-20:
No. of Shareholders
No, of shares
Aggregate shareholders/outstanding shares in the Suspense Account at the beginning of the year
Number of shareholders who approached for transfer of shares from the Suspense Account in the year
Number of shareholders to whom shares were transferred from Suspense Account
Number of shareholders whose shares were transferred to IEPF as per provisions of Section 124 & 125 of the Companies Act, 2013 and IEPF rules
Aggregate shareholders and the outstanding shares lying in the Suspense Account at the end of the year
*This number includes 106 equity shares reinstated into the Unclaimed Suspense account in the financial year 2019-20, which were debited in excess in the financial year 2018-19 at the time of transfer to IEPF Authority.
IEPF is a statutory body constituted by the Government of India under the Ministry of Corporate Affairs. It deals with claims related to unclaimed dividends of companies and is responsible for ensuring compliance related to the IEPF rules by the companies. According to the stated rules of the body, all unclaimed dividends of the companies must be transferred to the IEPF (Investors Education and Protection Fund) if they lie dormant for 7or more years.
After seven years, investors need to make the claim to IEPF authority to get the dividends sanctioned to his/her name. the process to claim such dividends is illustrated in the following section in a few simple steps.
EPS Payout Ratio
Jul 16, 2020
Aug 29, 2020
Jul 18, 2019
Jul 30, 2019
Jul 19, 2018
Aug 29, 2018
Jul 21, 2017
Aug 31, 2017
Mar 17, 2016
Mar 23, 2016
Jul 28, 2015
Aug 11, 2015
Procedure of IEPF Claim of Eicher Shares in Simple Steps
Raising Claim with IEPF Authority
In this step, the claimant must apply online on the IEPF’s website with his particulars and share ownership details.
Claimant to Company
After filing the IEPF Form 5, the claimant should contact the NODAL officer of the EICHER motors and send him a copy of the application form with the necessary documents.
Company to Authority
The nodal officer will verify the documents and send a verification report to the IEPF authority along with the documents and form. The company’s Nodal officer is obliged to submit the necessary documents within 15 days of receiving the application form the claimant’s side.
Authority to Claimant
Based on the particulars of the application and the verification report, the IEPF Authority’s Fund Manager takes the decision on the sanction of the claim. The fund manager can also ask the Nodal officer to file any further documents if necessary. In this case, the nodal officer will ask the claimant to file the documents asked by the authority. The authority can also reject the application if it has a lot of errors. Sometimes, the authority gives time to the claimant to rectify the mistakes in the application by sending it back to the claimant. There is generally a window of 15 days for the claimant to rectify the mistake in the claim form. If everything with the form is accurate, then the fund manager will sanction the dividends to the claimant’s account.
So, we saw how Eicher Motors shares have grown manifolds in the last twenty years. The company comeback is a remarkable story in itself. We also demonstrated how even small investments made in the company years ago, could fetch a handsome return to investors in today’s values. Therefore, claiming old dormant shares of Eicher Motors could prove to be really profitable for the shareholders. A shareholder can study the data in the previous section and contact the company’s nodal officer to find out details of your long lost investment. If the funds are still with the company then you can directly contact the Nodal officer Mr. D S Mehta, Manager (Legal & Secretarial) on the Email id: firstname.lastname@example.org.
If the shares are transferred to the IEPF fund, then you can contact a reputed financial consulting firm to get the shares through the IEPF claim. A legal expert will keep you from the hassle of the complex process of claim and ensure that the application is error-free. They will also help in the compilation of documents and contacting the nodal officer or authority in case of any discrepancy.
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