It is evident that more than 80,000 crores worth of shares are lying unclaimed with the IEPF Authority. 

It has opened an opportunity for the financial intermediaries to identify the Shareholders who have their shares lying unclaimed with IEPF and help such Shareholders in recovering their wealth. 

There are two primary difficulties faced by the intermediaries in locating and identifying such Shareholders. 

 1. Availability of IEPF Data 
2. On ground search mechanism 

Availability of IEPF data: -
a. The Financial Intermediaries purchase raw IEPF data from the market for their respective areas of operations.
b. The data is often misleading and inaccurate and difficult to manage.
c. A significant cost is paid for data acquisition before determining the revenue potential of such data. 

On ground search mechanism
a. Financial Intermediaries hire untrained staff for the field work to locate the addresses from the data and report back to the office.
b. The cost of hiring people to identify shareholders on ground is a very expensive mechanism as majority of the shareholders have been relocated to other addresses.
c. Even in the cases where the Shareholder is identified, the untrained staff leaves an unprofessional image of the Financial Intermediary.
d. Untrained staff is not adept at handling IEPF issues and falter at basic inquiries.
e. Interaction between untrained staff and Shareholders leave the impression that Shareholders are being contacted by local touts or agents who have come to commit some fraud. 

Research Study 
We did a study for understanding how efficient it is to conduct a on ground search of Shareholders whose shares are transferred to IEPF. 

We classified the on-ground address search as follows: -
1. Address not found – There are several addresses which were incomplete and were therefore cannot be located on ground.
2. Address found but client relocated/not found – Even in the cases where the address was complete and reachable, the Shareholder has relocated to another address and is not traceable.
3. Address found and client found – These shareholders who can be traced to their original address were either passed away or have somehow failed to receive the dividends or deposit them in bank accounts due to other issues. We visited 941 addresses to ascertain the potential of on ground search of Shareholders. 

Our findings: -

Total addresses where the client could not be located was 72.7%.

The Shareholder could only be found in 27.3% of the addresses. The addresses where shareholders are traced, 24% of the 257 Shareholders, i.e., 62 Shareholders have passed away.

So, effectively out of 941 Shareholders, 746 Shareholders were either not traceable or passed away.

Only 20.7% i.e., 195 Shareholders can only be traced directly by on ground search mechanism.

Therefore, the cost of searching all 1000 Shareholders is recovered from the clients converted out of these 195 Shareholders. This makes it unviable proposition for the Shareholder to take the services of intermediaries.

Therefore, searching manually for Shareholders door to door is an inefficient and unviable strategy.

Jeevantika Innovations