Investors unpaid dividends may top 45,000 in FY24: The Budget 2023-24 announces IT portal for unclaimed shares

As of December-end, the Investor Education and Protection Fund Authority (IEPFA) has received a staggering 36,000 applications (IEPF Form 5) from investors seeking to claim their unpaid dividends in the current financial year. According to official sources, this figure is anticipated to exceed 45,000 by the end of the fiscal year, marking an 18% increase compared to the previous year. The filing of these applications represents a record high for the first nine months of any financial year since the establishment of the authority in FY17.

The IEPFA has already refunded approximately Rs 12 crore in dividends to investors after assessing their applications, making it the highest refund amount in the first nine months of a financial year. In the preceding fiscal year (FY23), refunds issued by the IEPFA amounted to Rs 11.5 crore.

The surge in both application filings and refunds is attributed to enhanced management practices within the authority. A dedicated group within the IEPFA has been established to efficiently handle shares, reducing the time required for the approval of applications and subsequent issuance of refunds, according to an insider.

Established under Section 125 of the Companies Act, 2013, the IEPFA aims to promote investor education, awareness, protection, and facilitate the refund of claims to investors. Section 124 of the Act mandates that shares on which dividends have not been paid or claimed for seven consecutive years or more must be transferred by the company to IEPFA.

The Budget for 2023-24 announced the upcoming launch of an integrated IT portal designed to reclaim unclaimed shares and unpaid dividends from the IEPFA. The sources suggest that this portal will be operational by March. The integrated IT portal is expected to streamline the entire reclamation process, from document submission and verification to securing necessary approvals, tracking progress, and receiving shares or dividends. Its implementation is anticipated to bring much-needed transparency, providing claimants with real-time updates on the progress of their claims.

The IEPFA currently holds over 1.1 billion unclaimed shares, a figure that has more than doubled since FY18. Unclaimed dividends totaling over ₹5,500 crore were reported as of October 2022. The establishment of the integrated IT portal is seen as a significant step towards addressing these accumulated unclaimed assets and ensuring a smoother refund process for investors.