Compared with markets such as Brazil, South Africa and Taiwan, Indian companies offer relatively modest dividend yields. Yet, the value of dividends left unclaimed by investors has been rising steadily.
According to SEBI’s Annual Report for FY26, unclaimed dividends with listed companies rose 15.7% year-on-year to ₹2,689 crore, up from ₹2,324 crore in FY25. The amount stood at ₹1,838 crore in FY24, highlighting a sharp increase over the past two years.
In contrast, unclaimed mutual fund redemption amounts have remained broadly stable. They declined marginally by 0.5% to ₹1,122 crore in FY26 from ₹1,128 crore in FY25, although they were higher than the ₹1,024 crore recorded in FY24.
Under the Companies Act, 2013, dividends that remain unclaimed for seven consecutive years must be transferred by companies to the Investor Education and Protection Fund (IEPF), a fund established by the Central Government. Once transferred, investors can reclaim their money by filing claims with the IEPF Authority.
Government data shows that companies transferred unclaimed dividends worth ₹1,135 crore to the IEPF in FY25, following a significantly higher transfer of ₹2,523 crore in FY24. Over the five financial years from FY21 to FY25, companies transferred a cumulative ₹5,061 crore of unclaimed dividends to the IEPF, according to the government’s response to a Rajya Sabha question on undistributed dividends and shares transferred to the fund.
Despite the rising quantum of unclaimed dividends, the liability remains insignificant on corporate balance sheets. Classified as part of current liabilities, unclaimed dividends account for only a tiny fraction of companies’ short-term obligations.The increase in unclaimed dividends comes even as listed companies continue to return substantial cash to shareholders. Nifty 500 companies distributed nearly ₹5 lakh crore as dividends in FY26, equivalent to around 29% of their profits, according to a CNBC-TV18 analysis. However, this payout ratio has moderated from nearly 40% in FY23, indicating a more conservative approach to capital distribution.
To improve investor outreach and reduce the stock of unclaimed assets, SEBI has partnered with the Investor Education and Protection Fund Authority (IEPFA) under the Ministry of Corporate Affairs to launch the Niveshak Shivir initiative. The programme assists investors in reclaiming unpaid dividends and shares by providing support for IEPF-5 claim filings, dematerialisation of shares, and KYC and nomination updates.
(Edited by : Ajay Vaishnav)
