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Hidden pot of Rs 3,300 cr unclaimed shares beckons investors

For instance, HDFC Bank has 20.86 lakh unclaimed shares worth Rs 374 crore at current market prices

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With stock markets scaling new highs every few days, investors eyeing riches are making a beeline to stake their right over 'unclaimed' shares belonging to family or relatives.

Brokers say these days they are regularly getting requests from investors to reclaim this hidden or lost wealth.

According to a DNA Money analysis, over Rs 3,300 crore is lying in 6.7 crore unclaimed shares in just 125 companies.

Misplaced share certificates, lost documents and other issues often lead to unclaimed investments, which belong to the older generation. The share ownership is forgotten over time.

As per shareholding of listed firms on September 30, 2017, blue-chip companies have quite a chunk of shares categorised as 'unclaimed'. For instance, HDFC Bank has 20.86 lakh unclaimed shares worth Rs 374 crore at current market prices. Tobacco-to-hotels giant ITC has unclaimed shares valued at over Rs 300 crore. There are as many as 13 companies where the unclaimed shares booty is valued at more than Rs 100 crore each.

"Titan, Godrej Consumer Products, Vedanta, Asian Paints, and UltraTech Cement are among the popular firms where investors often find out shares being held in the name of their father or uncle or grandfather. Of late, we have seen many investors coming to stake claim over hitherto unclaimed shares. This trend could be due to rising markets," said a Mumbai-based stock broker.

A few other small- and medium-sized brokerages also said investors are increasingly coming in with old share documents to claim ownership.

"Be it a bull market or a bear market, once investors find out about unclaimed shares, they try to claim the legal right over such securities," said Satish Menon, executive director, Geojit Securities.

There are also many agents who operate as recovery facilitators for unclaimed shares. They usually charge a fee of 15-25% of the market value of the unclaimed shares and help rightful owners in establishing ownership. However, some cases of illegal transfer of shares have been also been detected, leading to regulators, financial intermediaries and agents becoming extremely cautious these days.

There are unclaimed shares worth between Rs 30 crore to Rs 60 crore each in stocks of Ambuja Cements, ACC, TVS Motor, EID Parry India, Apollo Hospitals, Hindalco Industries, DCM Shriram, Procter & Gamble Hygiene & Health Care, Godfrey Phillips India and Siemens India.

"In many cases, shares were bought and forgotten. It's only after 20-30 years that legal heirs realise that they may be a holding lot of shares. During times when stock markets do well, we have seen some cases of family members discussing ways to get those securities," said Deepak Sharma, a chartered accountant.

Venu Madhav, chief operating officer, Zerodha, said that The Companies Act, 2013 states that all shares in respect of which no dividends have been paid or claimed by any investor for seven consecutive years will be transferred by the company in the name of the Investor Education and Protection Fund (IEPF).

"In the event that the shares have been transferred to the IEPF, an investor would be able to claim such dividend and shares by submitting the IEPF-5. The investor will need to have details of the CIN (corporate identity number) of the company whose shares he's claiming along with details of his own bank and demat account to which the credit of such dividends/shares should be affected," added Madhav.

...& ANALYSIS

  • For instance, HDFC Bank has 20.86 lakh unclaimed shares worth Rs 374 crore at current market prices
     
  • Tobacco-to-hotels giant ITC has unclaimed shares valued at over Rs 300 crore
     
  • There are as many as 13 companies where the unclaimed shares booty is valued at over Rs 100 crore each
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