Reclaim Reliance Industries shares from IEPF Authority
“Reliance Industries Ltd. grew from a small company into one of the world’s largest and best-known industry in just four decades.”
An investment of one thousand rupees in stocks of Reliance in 1977 is today worth Rs 16,54,503 over 1,600 times its value. How do these numbers affect the average investor? Essentially, the point of this data is that if anyone by chance had an invested stock in 1977, they could become wealthy very quickly. Recovering shares becomes imperative in this scenario. As per recent data released by RIL, they have the highest number of unclaimed dividends and shares in India.
What is the source of this unclaimed dividend?
Most people invest their money in various companies to reduce the risk of losing their money. Some people find this concept profitable, but they tend to forget their small investments and do not reap the dividends during the process. Despite being bought, the shares remain dormant for years without being claimed. In some cases, senior citizens who buy shares forget to nominate an heir before death. As a result, dividends and shares in companies may go unclaimed.
Reliance Merger and amalgamation history:
In 1991 Reliance Petrochemicals Ltd. (RPL) was merged with RIL. The scheme of amalgamation was agreed at a swap ratio of 1:10. Shareholders of RPL (Reliance Petrochemicals Ltd.) were issued one share of RIL for every ten shares of RPL.
In January 1995, two of Reliance Group companies, Reliance Polypropylene Ltd (RPPL) and Reliance Polyethylene Ltd (RPEL) were merged with RIL.
In the merger of RPPL (Reliance Polypropylene Ltd) 30 shares of RIL were given to RPPL shareholders against every 100 shares.
In case of RPEL (Reliance Polyethylene Ltd) 25 shares of RIL were given to RPEL shareholders against every 100 shares.
In 2007 Reliance Industries announced merger of IPCL (Indian Petro Chemicals Limited) into RIL with the swap ratio of 1:5.
| COMPANY A | COMPANY B | SWAP RATIO |
|---|---|---|
| Reliance Petrochemicals Ltd. | Reliance Industries Ltd. | 1:10 |
| Reliance Polypropylene Ltd. | Reliance Industries Ltd. | 30:100 |
| Reliance Polyethylene Ltd. | Reliance Industries Ltd. | 25:100 |
| Indian Petro Chemicals Ltd. | Reliance Industries Ltd. | 1:5 |
| Reliance Petroleum Ltd. | Reliance Industries Ltd. | 1:16 |
Reliance India Limited: Unclaimed Shares
According to a recent report released by the MCA, Reliance Industries Limited also has the highest number of unclaimed dividends in India. Almost 113 crores of unclaimed dividends of RIL were recorded until 2016. All information regarding unclaimed dividends can be found on the Reliance Industry Limited website. The company has also asked most of its shareholders to claim their dividends and obtain the recovery of shares or refund of shares before RIL is forced to transfer the amounts to IEPF.
Status of Unclaimed Dividend of Reliance Industries
Suppose that you purchased 100 shares of Reliance India Limited at a price of Rs. 25.48 in 1995. In total, you would have invested Rs. 2548. The company issued bonus shares at a 1:1 ratio in 1997. Now, what does this mean?
Bonus shares are free shares that the company gives to its shareholders based on their loyalty and trust in the company. Bonus shares are issued at a 1:1 ratio, which means that for every 10 shares owned by an investor, the company issues him another 10. Therefore, if you had purchased 100 shares in 1995, they would have become
100 + 100 = 200 shares.The company again issued bonus shares in 2009 at a 1:1 ratio. Therefore, you would have now been entitled to 400 shares.RIL again issued bonus shares at a 1:1 ratio in 2017. With the increase in shares from 400 to 800 (400 + 400 bonus shares), you now have 800 shares in your account.Reliance India Ltd. shares are currently worth Rs. 2, 061 each as of February 2021. In other words, the net calculated value of your shares will be Rs. 1648,800 (Sixteen Lakh Forty-Eight Thousand Eight Hundred) as of February 2021.Therefore, 100 Reliance shares grew from Rs. 2548 in 1995 to Rs. 1648800 in just 25 years. Approximately 64709% of growth. There’s no denying that the company has grown enormously over the past 25 years, and that’s without taking into account dividends paid out in those years.
You would have made great returns if you had invested just 100 shares of Reliance India Ltd. in 1995. Because of this, we have recommended that recovery of any unclaimed Reliance shares from the past (especially from the 1980s) could easily make you a crorepati today. However, the question that arises now is how could you obtain the money even if you find an old share certificate of Reliance in your grandfather’s name? It would be difficult to claim these shares because you cannot simply claim them from the company since it has been so long since the investment was made. As per the government’s rules regarding dormant shares, these older shares will now be owned by the Investor Education and Protection Fund (“IEPF”) created by the government.
Claim from Investor Education and Protection Fund Authority
In 2017, the Ministry of Corporate Affairs announced Investor Education and Protection Fund (IEPF) rules. According to the rules, any money remaining in the unpaid dividend account of a company for seven years without a claimant during that time must be transferred to the IEPF. The money must be transferred to the fund with interest for the same period of time. The said amount can only be claimed by a claimant after applying to the IEPF. Therefore, the IEPF became a one stop solution for the investors to lay claim on lost shares.
It operates under the regulations of the Companies Act, 2013 and the Investor Education and Protection Fund Rules, 2016. According to these rules, after a company declares a dividend, investors have 30 days to apply to the company and receive their dividend directly from the company. The IEPF rules says that every company creates an quot;Unclaimed Dividend Fund”, and if investors do not claim their money within 30 days of the release of dividends, their shares will be transferred to this special fund.
As soon as the amount is transferred to the Unpaid Dividend Fund, the company publishes the names of investors on its website. To access the money from this fund, the investor must submit a special request to the Nodal Officer of the company. Even after dividends are transferred to this special fund, investors are not allowed to claim their dividends for seven years then the dividend is transferred to the IEPF as per the rules. For dividends after that period, the investor must file a claim with the IEPF authority.
Conclusion
According to the above data, owning Reliance shares from the 80s could be the most profitable investment ever.
Recovering the shares of Reliance Industries Ltd. is the right thing to do, especially when the economy is under pressure due to the Pandemic. In order to claim each lost share, one would need legal assistance, but spending a small amount to reclaim the shares is not a big deal considering the profits that will result.
If you need any assistance for recovering unclaimed Reliance Industries shares from IEPF Authority then contact us today.
