Many investors don’t realize that their long-forgotten or unclaimed dividends—and even the shares themselves—can eventually get transferred to a government-managed fund in India known as IEPF. If you’re struggling with the recovery of shares, understanding how the Investor Education and Protection Fund works is the first step toward reclaiming your rightful assets.
In this article, we break down everything you need to know about IEPF, why shares are transferred to it, how to recover shares from IEPF, and what eligibility conditions apply. Whether you’re dealing with lost shares or helping a family member recover an old investment, this guide will walk you through the essentials.
What Is IEPF?
IEPF stands for Investor Education and Protection Fund, a statutory body established by the Government of India under Section 125 of the Companies Act, 2013. It is administered by the Ministry of Corporate Affairs (MCA) and serves two main purposes:
- To promote investor awareness and education.
- To manage unclaimed dividends, matured deposits, and the shares related to them.
The fund holds money and shares that have remained unclaimed for seven consecutive years, after which the government becomes the temporary custodian.
When Are Shares Transferred to IEPF?
If a shareholder does not claim dividends for seven consecutive years, the company is legally required to transfer both the unclaimed dividends and the corresponding shares to the IEPF.
Key Timeline:
- Year 1–6: Dividends remain unclaimed but are held by the company.
- Year 7: If still unclaimed, the dividend amount and associated shares are transferred to IEPF.
- Post Year 7: Shares are held under the IEPF Authority until claimed by the rightful owner.
It’s important to understand that the transfer isn’t limited to the dividend amount. The actual shares are also transferred if the dividends on them haven’t been claimed for seven years straight.
What Happens to the Shares?
Once transferred, the shares are moved into a demat account held by IEPF Authority. These shares are no longer in the investor’s demat or physical account until a proper recovery of shares from IEPF process is followed.
No trading or transaction can occur on these shares unless the rightful owner claims them.
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Eligibility to Claim Shares from IEPF
Only the registered shareholder or their legal heir, nominee, or successor can claim the shares or dividends from IEPF.
Eligible claimants include:
- The original shareholder
- A legal heir (in case the shareholder is deceased)
- A nominee (if nomination was registered)
- A successor or administrator of the estate
To proceed with the recovery of lost shares, one must provide adequate legal documents to prove entitlement.
Step-by-Step Process to Recover Shares from IEPF
Here’s how you can initiate the recovery of shares from IEPF:
1. Check Share Status
Visit the IEPF portal and check whether the shares and dividends have been transferred. You’ll need basic shareholder details like PAN, folio number, or demat account number.
2. Download Form IEPF-5
The claim process begins with filling out Form IEPF-5, which is available on the MCA website. Ensure all details are correct and match with your demat or shareholding records.
3. Submit the Form Online
After completing Form IEPF-5, submit it online. A Service Request Number (SRN) will be generated for tracking.
4. Send Physical Documents to the Company
Along with the acknowledgment of Form IEPF-5, send these documents to the nodal officer of the company:
- A copy of the IEPF-5 acknowledgment
- Self-attested ID and address proof
- Cancelled cheque (for dividend refund)
- Indemnity bond and affidavit (notarized)
- Legal documents in case of inheritance (Will, succession certificate, etc.)
5. Company Verification & Forwarding
The company verifies the claim and sends its verification report to the IEPF Authority within 30 days.
6. IEPF Authority Approval
Once verified, the IEPF Authority processes the claim and initiates the restoration of shares and unclaimed dividends to your demat account and bank account, respectively.
How Long Does the Recovery Process Take?
The entire process typically takes 60 to 120 days, depending on how quickly the company verifies your claim and submits the report to IEPF.
Delays often occur due to:
- Missing or incorrect documentation
- Legal heir disputes
- Non-submission of original physical share certificates (in some cases)
This is why it’s advisable to get professional assistance if the case involves the recovery of lost shares or complex inheritance claims.
Also Read: Types of Alternative Investment Funds in India
What If Shares Are in Physical Form?
If your shares are still in physical form, they must first be dematerialized (converted into electronic format) before initiating the IEPF claim. This includes:
- Getting KYC done
- Linking PAN, Aadhaar, and bank details
- Requesting a demat account setup through a depository participant (DP)
Only after this can the shares be re-transferred to your name.
Tips to Avoid Share Transfer to IEPF
- Claim Dividends Regularly: Don’t ignore small dividend payouts—they’re the first warning sign.
- Keep Contact Info Updated: Ensure your email, phone number, and bank details are updated with the company or registrar.
- Demat Physical Shares: Many cases of unclaimed shares involve outdated physical certificates.
- Track Old Investments: If you’ve inherited shares, start the claim process early to avoid delays.
Final Thoughts
The recovery of shares from IEPF is entirely possible—but it does require diligence, documentation, and patience. Many investors are unaware of how much-unclaimed wealth lies under IEPF custody, especially in cases involving inherited or forgotten shares.
If you’re trying to recover lost shares or unclaimed dividends, don’t delay. Start by checking the IEPF records, gather your documents, and file the claim through the right channels.
With the proper approach, your investments can be safely restored—no matter how long they’ve been sitting unclaimed.
FAQs
1. What is the IEPF’s role in shareholding?
IEPF acts as a custodian of unclaimed dividends and shares for investors. After seven years of non-claim, the company transfers these to the IEPF Authority.
2. Can I recover shares transferred to IEPF?
Yes. You can apply through Form IEPF-5 along with proper documentation to reclaim both dividends and shares.
3. Who can claim shares from IEPF?
Only the registered shareholder, legal heir, nominee, or successor is eligible to claim from IEPF.
4. How do I know if my shares are with IEPF?
Use your PAN or folio number to search the IEPF website for any unclaimed shares or dividends under your name.