How Recovery of Eicher Motors Dormant Shares Can Make You Rich Overnight By FCS Shweta Gupta


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. 

Calculation

  • 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)

Source: Click here Click here 

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.

Announcement Date

Effective Date

Dividend Type

Dividend (%)

Remarks

11/03/2020

19/03/2020

Interim

1250%

Rs.125.0000 per share (1250%) Interim Dividend

10/05/2019

24/07/2019

Final

1250%

Rs.125.0000 per share (1250%) Dividend

09/05/2018

02/08/2018

Final

1100%

Rs.110.0000 per share (1100%) Dividend

08/05/2017

31/07/2017

Final

1000%

Rs.100.0000 per share (1000%) Dividend.

14/03/2016

22/03/2016

Interim

1000%

Rs.100.0000 per share (1000%) Interim Dividend

16/02/2015

11/03/2015

Final

500%

Rs.50.0000 per share (500%) Dividend (BC has been Revised from 19/03/2015 to 26/03/2015)

12/02/2014

12/03/2014

Final

300%

Rs.30.0000 per share (300%) Dividend

12/02/2013

13/03/2013

Final

200%

Rs.20.0000 per share (200%) Dividend

11/02/2012

13/03/2012

Final

160%

 

05/02/2011

08/03/2011

Final

110%

 

15/02/2010

05/03/2010

Final

70%

 

30/03/2009

20/05/2009

Final

50%

 

28/04/2008

26/05/2008

Final

50%

 

06/03/2007

16/03/2007

Interim

290%

290% Dividend (250% one time special dividend + 40% Interim Dividend)

02/05/2006

22/06/2006

Final

40%

AGM

27/06/2005

05/08/2005

Final

40%

AGM

24/08/2004

17/09/2004

Final

35%

AGM

02/05/2003

17/07/2003

Final

35%

AGM

09/05/2002

15/07/2002

Final

25%

AGM (Revised)

11/05/2001

25/06/2001

Final

20%

 

19/04/2000

 

Interim

20%

 

26/05/1999

 

Final

15%

AGM & Dividend

09/06/1998

 

Final

10%

 

29/05/1997

 

Final

10%

 

Source: Click here Click here 

Last Date of Dividends Transfer to IEPF for Eicher Shares

The following table gives the deadline for investors to claim their dividends for the last few financial years before they get transferred to the IEPF fund. 

For the Financial Year

Due date for transfer to the Central Government

2013 (January to December)

April 25, 2021

2014 (January to December) 

April 25, 2022

2015-16 (January to March) *

April 18, 2023

2016-17 (April to March)

September 12, 2024

2017-18 (April to March)

September 14, 2025

2018-19 (April to March)

August 30, 2026

2019-20 (April to March) *

April 12, 2027

*Interim Dividend was announced by the Board of Directors in March 2016 and March 2020 respectively.        

Source of informationClick here 

Details of unclaimed shares in Suspense Accounts as per its Annual financial report of 2019-20:

S.no.

Particulars

No. of Shareholders

No, of shares

1.

Aggregate shareholders/outstanding shares in the Suspense Account at the beginning of the year

95

3748

2.

Number of shareholders who approached for transfer of shares from the Suspense Account in the year

1

7

3.

Number of shareholders to whom shares were transferred from Suspense Account 

1

7

4.

Number of shareholders whose shares were transferred to IEPF as per provisions of Section 124 & 125 of the Companies Act, 2013 and IEPF rules

33

1657

5

Aggregate shareholders and the outstanding shares lying in the Suspense Account at the end of the year

61

2190*

 *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.       

Source:   Click here    

Dividend Growth Data for Company in Recent Years

What is IEPF?

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. 

ExDividend Date

Dividend

EPS Payout Ratio

Type

Payment Date

Yield

Jul 16, 2020

14

-13%

TTM

Aug 29, 2020

0.72%

Jul 18, 2019

27.3348

119%

TTM

Jul 30, 2019

2.85%

Jul 19, 2018

25

96%

TTM

Aug 29, 2018

1.14%

Jul 21, 2017

20.8737

119%

TTM

Aug 31, 2017

0.87%

Mar 17, 2016

17.5

 

TTM

Mar 23, 2016

0.62%

Jul 28, 2015

20

 

TTM

Aug 11, 2015

2.18%

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. 

In Conclusion…

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: dsmehta@eichermotors.com

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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