What if we tell you that there is a company that has given almost 100000% return on investment in its shares within a time span of just 11 years. Would you believe us? No matter how unbelievable it sounds but this is true.

This incredible milestone has been achieved by Bajaj Finance Ltd who has provided a return of 1,00,000% to its investors. It was floated in March 2009 at the price of Rs. 4.69 per share and was trading at more than Rs. 5662 per share. This simply means that even if you had invested just Rs. 14070 in March 2009 to buy 3000 shares of Bajaj Finance you would have made a profit worth more than a crore.

Now, why is it relevant? It is relevant for those investors who have forgotten investment in the company from 2009 as it could make the investor rich due to today’s worth of shares. In this blog, we will understand the growth of Bajaj shares in the past decade and understand how claiming dividends from IRPF for these shares could be profitable.

History of the Bajaj Finance’ Growth

Bajaj Finance Ltd. is one of the fastest growing (stock price wise) finance companies in India. A stalwart of big NBFCs in India, Bajaj Finance is a subsidiary of Bajaj Finserv Ltd., which itself is a subsidiary of Bajaj Holding and Investment Ltd. The company was incorporated in March 1987 and went public in 1994. Initially, it offered equity shares worth Rs. 10 each with a premium of Rs. 80/share. Bajaj Finance crossed the milestone of Rs. 500 Crores in annual disbursement in the year 2000. By the year 2006, it was able to double up this figure. In the same year, it’s Assets Under Management (AUM) reached Rs. 1, 000 Crores. In 2008, the investors’ funds crossed the landmark of Rs. 1,000 Crores and doubled the figure in 2012. In the following year, its Assets Under Management grew further to cross the benchmark of Rs. 20, 000 Crores. Bajaj Finance Ltd. acquired Bajaj Financial Solutions Ltd. in 2014 for a modest price of Rs. 17 Crores. In the meanwhile, the company AMU continued to grow and crossed the milestone of Rs. 75, 000 crore in 2017. Even though the pandemic affected its business, Bajaj Finance managed to increase its AUM by 27% and taking it to Rs. 1, 47, 153 Crores.

Calculation

  • Suppose an investor bought shares of Bajaj Finance Ltd. in 2009 for Rs. 14070.
  • The No. of shares corresponding to this price at Rs. 4.69 per share would be = 3000 shares.
  • In 2016, Bajaj Finance issued bonus shares in the ratio of 1:1. Issue of bonus shares at the ratio 1:1 means for every One share owned by an investor, it will issue another share. This means that if an investor had 3000 shares then it would have become 6000 shares, i.e., double the initial numbers.
  • Now, the price of a single share of Bajaj Finance Ltd., as of Feb 2021 is Rs. 90. That makes the total value of shares as per today’s rate:

Rs. 5264.90 x 6000 shares = Rs. 31589400 (Three Crore Fifteen Lakh Eighty Nine Thousand Four Hundred)

  • The above amount is calculated only for the total price of shares. If we calculate the dividends associated with the total shares then the amount would have been even bigger.

Source: https://www.bajajfinserv.in/shareholders-information-dividend-history

You can calculate the total dividend from the table in the following section.

So, if you had invested just Rs. 14070 in 2009 in Bajaj Finance Ltd. shares then you would have become a Crorepati by today.

Dividends Provided by Bajaj Finance

The following table will give detailed information about dividends released by Bajaj Finance Limited on a yearly basis. One can study the data and calculate the dividends associated with his/her shares accordingly.

Annou-ncement Date Effective Date Dividend Type Dividend(%) Remarks
24/02/2020 03/03/2020 Interim 500% Rs.10.0000 per share(500%)Interim Dividend
16/05/2019 11/07/2019 Final 300% Rs.6.0000 per share(300%)Dividend
17/05/2018 05/07/2018 Final 200% Rs.4.0000 per share(200%) Dividend
17/05/2017 06/07/2017 Final 180% Rs.3.6000 per share(180%)Dividend
24/05/2016 14/07/2016 Final 70% Rs.7.0000 per share(70%)Final Dividend
02/03/2016 16/03/2016 Interim 180% Rs.18.0000 per share(180%)Interim Dividend
20/05/2015 09/07/2015 Final 180% Rs.18.0000 per share(180%)Dividend
14/05/2014 03/07/2014 Final 160% Rs.16.0000 per share(160%)Dividend
15/05/2013 04/07/2013 Final 150% Rs.15.0000 per share(150%)Dividend
16/05/2012 05/07/2012 Final 120%
17/05/2011 29/06/2011 Final 100% Rs.10.00 per share(100%)Dividend
13/05/2010 08/07/2010 Final 60%
20/05/2009 29/06/2009 Final 20%
21/05/2008 27/06/2008 Final 10% AGM
16/05/2007 28/06/2007 Final 30% AGM
19/05/2006 29/06/2006 Final 40% AGM
12/05/2005 29/06/2005 Final 75% AGM
15/06/2004 15/07/2004 Final 60% AGM
13/05/2003 10/07/2003 Final 45% AGM
13/05/2002 10/07/2002 Final 45% AGM
05/06/2001 29/06/2001 Final 30% AGM
17/04/2000 Final 30% 30% Interim Dividend = Final Dividend
21/05/1999 Final 25% AGM and Dividend
20/05/1998 Final 22%
28/05/1997 Final 20%

Source: https://economictimes.indiatimes.com/bajaj-finance-ltd/infocompanydividends/companyid-11260.cms

What is Investor Education and Protection Fund?

The Government of India came up with the idea of introducing IEPF to address the ever-increasing issue of people forgetting about their shares invested long ago in a company. The IEPF is aimed at protecting the rights of investors and spreading awareness among them. With IEPF, the unclaimed dividend and lost shares that have remained dormant for more than 7 years are taken care of on behalf of the rightful shareholders. One of the reasons dividends of shares remain unclaimed for years is because people tend to forget about their ownership of shares if the amount invested is low. Other possible reasons for the people not claiming shares is that the owner of the share is not alive (may have bought shares at an elderly age and died before naming an heir to his share ownership).

Current Status of Bajaj Finance Limited’s Dividends 

Bajaj Finance’s unclaimed dividends declared for the financial year 2013-2014 were recently transferred and the respective details were released in the annual report. The dividends were transferred to the IEPF in August 2020. The deadline associated with the dividends for the next year 2014-2015 will be released in 2021’s annual financial report. In case a shareholder has not crossed the limit of 7 years, the investor can claim his/ her dividends, by approaching the Company Registrar/ Transfer Agent/ Nodal Officer of the Company with the ownership documents.

  • An investor can check the status of unclaimed dividends, declared by Bajaj Finance Limited from https://www.bajajfinserv.in/finance-investor-relations-unclaimed-dividends
  • For more information related to Bajaj Finance Limited’s stocks. visit https://www.bajajfinserv.in/fy20-bajaj-finance-limited-annual-report.pdf

The Annual Reports of Bajaj Finance Company give the status of dividends and shares which are transferred to the IEPF account. According to its Annual Report of 2019-2020, all the unclaimed dividends till the financial year of 1995-1996 were transferred to the general revenue account of the Central Government. These funds were earlier used for public welfare schemes but now the funds are transferred to the IEPF. The investors who want to claim the shares must apply to the Registrar of Companies (RoC) office in Maharashtra.

Shares Transferred to the IEPF

According to the Annual Report released by the company for the fiscal year 2019-2020 the following unclaimed shares have been transferred to the IEPF during the Financial Year of 2020:

Financial Year Number of Shareholders Number of Unclaimed Shares
2011-2012 38 40, 000
2012-2013 28 30, 200
Total 64 70, 200

Source: https://www.bajajfinserv.in/fy20-bajaj-finance-limited-annual-report.pdf

In the previous financial year, it had transferred Seventy Thousand Two Hundred unclaimed shares worth crores of rupees into the account of IEPF. The total no. of investors whose shares were transferred to the IEPF was sixty-four (64). It could seem that the number of shareholders whose shares are transferred to the IEPF is not much but compared to the huge prices associated with them, the corresponding no. is huge. For instance, the corresponding no. is 70, 200 shares x Rs. 5624.90 = Rs. 394867980

Note: This amount is calculated by multiplying the number of shares transferred to their current price.

As we will see, the number of unclaimed shares transferred to the IEPF account worth crores. the corporate has a huge chunk of unclaimed shares within the IEPF. The shareholders are advised to look into their investment history, or the ownership of shares passed on from a deceased loved one and claim their dividends and shares from IEPF.

IEPF Rules to Claim Shares

As discussed above, a stockholder won’t lose the rights over the dividend amount and therefore the shares once they were transferred to the Govt’s IEPF fund. However, with the introduction of IEPF, a shareholder has to claim his/ her right over the dividend amount after the shares are transferred to the IEPF Account. All he has got to do is apply to the fund manager of the IEPF. Nonetheless, Bajaj Finance Ltd. still sends individual call letters, through posts and other modes of communication, to keep their shareholders informed of their holdings within the company and ask them to timely claim their dividends. Once the dividends, along with the shares, get transferred to the IEPF, then it becomes a little difficult for the stockholders to recover their shares. This is due to the procedure followed by the fund manager of IEPF, which is time-consuming due to the immensely exhaustive ownership verification process for shareholders.

To be sure that the refund goes to the rightful owner of shares, the fund managers do thorough scrutinization of all the documents before initiating the transfer of the quantity and therefore the shares. This is often the rationale why Bajaj Finance Ltd. advises its shareholders to get their dividend from the corporate itself because it takes less time, and the process is simple. The shareholders can simply apply to the Company’s Registrar or nodal officer for this purpose. If the shares are already transferred to IEPF, then one can approach the Nodal Officer of the corporate to understand the claim process. One can contact the Bajaj Finance Limited’s Nodal Officer one the email id: [email protected]

To Summarize…

As we’ve seen in the previous sections, Bajaj Finance Ltd. has given a return of almost 1, 00, 000% to its stakeholders in just 11 years. The ever-increasing share prices of the company have ensured that just Rs. 14000 invested within the stocks of Bajaj Finance Ltd. in March 2009 would give a return of more than three crore rupees. If you have got some unclaimed shares of Bajaj brought by any elder member of your home, or you have it yourself, then it is the best time to claim them as it could help greatly in coming out of the financial crisis triggered by the pandemic.

Gather information regarding your dividends accumulated thus far for your stocks within the company, and file an application to get your dividend from Bajaj Finance Ltd. you’ll need to apply to the Nodal Officer of the corporate. If the amount is already transferred to the IEPF, then you should hire a legal consultancy to help you sail through the process of getting dividends from IEPF. The process to file for a claim from IEPF is online and the application must be completely error free. Also, one needs to regularly be in touch with the Nodal officer and then the IEPF authority to ensure that the claim is passed smoothly from their ends.

A legal consultant can help you with error-free form filing and end to end liasoning with the Nodal officer and IEPF authority’s fund manager to get the required claim. All of this can be managed effectively by a consultant while you can focus on your current business or job without worrying about your dividend claim status.

*****

Disclaimer: The contents of this article are for information purposes only and do not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.

Author Bio

More Under Finance

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

April 2021
M T W T F S S
 1234
567891011
12131415161718
19202122232425
2627282930