Investor queue outside IEPF grows longer by the year, shows data

A government body holding ‘unclaimed’ shares has seen a surge in pending applications for their refund.

The number of pending applications stood at 23,969 as of January 2022-23, shows data from the Investor Education and Protection Fund Authority’s (IEPFA) annual report. This is an almost 32-time increase from 756 in 2017-18.

The annual report says that pending applications are the result of want of clarification, rectified documents, and reports from company or claimant.

“Notices are issued from time to time to the companies and claimants for early settlement of the claims,” said the annual report.

The body declined a plan from the Securities and Exchange Board of India (Sebi) to allow companies to give refunds, according to a report earlier this week.

The government began to transfer shares it deemed to be unclaimed to the IEPF in October 2017. The body is responsible making refunds of shares, unclaimed dividends, matured deposits/debentures etc. to investors, promoting awareness among them, and protecting their interest.

The definition of an unclaimed share is one on which dividends were not claimed for seven years. This point has been criticised on the basis that dividends can also be very limited in the case of small shareholders, sometimes less than Rs 10-Rs 20. Investors may not bother to encash cheques for such amounts. Such shares are also transferred from the investor's account to the IEPF.

While the authority does not provide a break-up of the total value of shares it holds, the number of shares has surged to over one billion as of 2021-22. The value of dividends lying unclaimed is Rs 5,539.25 crore as of October 2022, according to Lok Sabha data.

The surge in pending applications also comes on the back of an increasing number of investors seeking a refund. The number of such applications was 8,255 in 2018-19. This increased to 30,317 by January 2022-23, according to details available in the 56th report of the Standing Committee on Finance presented in the Parliament in March 2023.