“Company’s Recommendation to the Shareholders / Investors”

Investors  should convert  their  physical  holdings  of  securities  into  demat  holdings. Holding Securities  in  demat  form  helps  investors  to  get  immediate  transfer  securities.  No  Stamp duty is payable on transfer of shares held in demat form and risk associated with physical certificates such as forged transfers, fake certificates and bad deliveries are avoided.

Benefits of Demat

  • Easy convenient & secure mode to hold securities.
  • Elimination of bad deliveries.
  • Elimination of all risks associated with physical certificates.
  • Immediate transfer/ trading of shares.
  • No Stamp Duty payable on transfer of Demat shares
  • Fast settlement cycle.
  • Faster disbursement of non-cash corporate benefits such as rights, bonus etc.
  • Elimination of problems related with transmission of shares
  • Ease in portfolio monitoring.
  • Ease of pledging of shares.

Procedure for Dematerialization of shares

  • Open an Account with a Depository Participant (DP) registered with SEBI and obtain a unique Client ID number.
  • Fill  up  Dematerialization  Form  (DRF)  provided  by  the  DP  and  surrender  the  physical shares intended to be dematerialised to the DP along with the Form.
  • Upon  receipt  of  the  physical  shares  and  DRF,  the  DP  will  send  electronic  request through  the  Depository (NSDL  or  CDSL) to  Registrar &  Transfer  Agent  (RTA)  of  the Company for  confirmation  of  Demat.  Each  request  will  bear  a unique  transaction number.
  • Simultaneously, the DP will submit the DRF and the shares to the RTA of the Company to confirm the Demat.
  • After verifying the documents received from the DP, the RTA will confirm the Demat to the Depository(NSDL or CDSL)
  • Then, the  said  confirmation  will  be  passed  on  from  Depository  to the DP,  which  holds your account.
  • After  receiving  this  confirmation  from  the  Depository,  the  DP  will  credit youraccount with the dematerialized shares.
  • The DP will then hold the shares in the Demat form on your behalf and you become the beneficial owner of these dematerialized shares.

Frequently asked questions on Dematerialization of shares

  • What is a Depository?

    A depository is an organisation which holds securities (like shares, debentures, bonds, government securities, mutual fund units etc.) of investors in electronic form at the request of the investors through  a registered depository participant. It also provides services related to transactions in securities.

  • How is a depository similar to bank?

    It can be compared with a Bank, which holds the fund for deposits. A bank - depository analogy is given in the following table


    • Holds funds in an account
    • Transfers  funds  between  accounts on  the  instructions  of  the  account holder
    • Facilitate transfer without having to handle money
    • Facilitates safekeeping of money


    • Holds securities in an account
    • Transfers securities between accounts on the instructions of the Beneficial Owner account holder
    • Facilitates transfer of ownership without having to handle securities
    • Facilitates safekeeping of securities
  • How many Depositories are registered with SEBI?

    At present two Depositories namely National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) are registered with SEBI.

  • Who is a Depository Participants (DP)?

    A DP is an agent of the Depository through which it interfaces with the investor and provides depository services.

  • Who can be DP?

    Public  Financial  I nstitutions,  Scheduled  Commercial  Banks,  Foreign  Bank  operating  in India  with  the  approval  of  the Reserve Bank  of  India,  State  Financial  Corporations, Custodians, Stock-brokers, Clearing Corporations/ clearing houses, NBFCs and Registrar & Transfer Agent complying with the requirements prescribed by SEBI can be registered as DP.

  • Who is an Registrar and Transfer Agent (RTA)?

    An RTA is an agent of the issuer. RTA acts as an intermediary between the issuer and depository for providing services such as dematerialization, rematerialization, initial public offers (IPO) and corporate actions.

  • Is dematerialization of securities compulsory?

    According  to  the  Depositories  Act,  1996,  an  investor  has  the  option  to  hold  securities either in physical or electronic form. Part of holding can be in physical form and part in demat  form.  However,  SEBI  has  notified  that  settlement  of  market  trades  in listed securities should take place only in the demat mode.

  • What happens to the physical certif icates after they are dematerialized?

    After dematerialization, physical certificates may be retained / destroyedby the Issuer / Registrar & Transfer Agent.

  • After submitting DRF form and certificates to the DP, within how many days the dematerialization will take place?

    As per regulations in force presently, the dematerialization process should be completed within  15  days  of  receipt  of  physical certificates  by  the  Issuer/ Registrar  &  Transfer Agent.

  • If the demat request is not processed within the stipulate d time, what do I do?

    Contact your DP to look in the delay.A Beneficiary Owner can also inform the Investor Grievances department of the Depository to look in the delay.

  • Is it compulsory to mention the ISIN of the security while filling up the DRF?

    Yes.The ISIN of the security should be mentioned in the DRF, to ensure that the correct security is  dematerialized.If,  however,  the  investor  does  not  know  the  ISIN, the  same can be obtained from theDP or from Depository’s website.

  • Is transfer deed required for de materializing physical certificates?

    No. There is no need to fill in a transfer deed. The physical certificates have to be accompanied by a DRF, which can be obtained from the DP.

  • Can a BO hold his securities partially in physical form and partially in demat form?

    Yes.Part  of  the  Beneficiary Owner’s holdings can be held in physical form as per the choice of the investor. Though it is advisable to have the entire holdings held in demat mode so that the holdings have liquidity as and when available.It should be noted that part dematerialization of  holdings  represented  by  asingle  physical  certificate  is  not allowed.

  • Can a sole holder of the share certificate, add any name as a joint holder, at the time of dematerializing the share certificate?

    No. It is not possible to add any name while dematerialization of a share certificate. If the shares held in single name are intended to be held in any joint account, they have to  be  transferred  to  such  names  before  they  are  dematerializedAlternatively,  such shares can  be  dematerialized  first  in  the  demat  account  in  the  single  name  and  then transferred  to  the  demat  account  in  the joint  names,  or  vice-versa,  through  an  off-market transaction.

  • Can securities in odd lots be dematerialized?

    Yes. Securities in odd lots can be dematerialized.

  • Do dematerialized securities have certificate number, distinctive range number or certificate numbers?

    No. Dematerialized  securities  do  not  have  any  of  the  numbers  mentioned  above. Securitiesheld  in  demat  form  are  fungible, which  means  that any  share of  an ISIN  is similarto any other share of that ISIN.

  • Can electronic holdings be converted back in physical certificate form ?

    Yes.  It  can  be  done  through  Rematerialization,  which  is  the  process  of  converting electronic holdings back into physical certificates.

  • Can debt instruments,government securities and mutual fund units be dematerialized in the same demat account?

    Yes.  Debt instruments,  mutual  fund  units,  government  securities  can  also  be  held dematerialized form in the same demat account where equities are held.

  • What is Transposition - cum - demat?

    Transposition-cum-demat  facility  enables  an  investor  to  transpose  names  of  the  joint holders  in  desired  order  along  with the  process  of  dematerialization  of  certificates. Transposition-cum-dematerialization  facilitates  dematerialization  of certificates  held  in different  order  of  names  through  one  demat  account,  provided  the  securities  to  be transposed are held in the same joint names, but, in a different order.Illustratively if A owns a security, which he holds in the joint names of ABC, ACB, etc. he  can  first  transpose  them  in  the  name  of,  say,  ABC  in  which  order  demat  account might  have  been  opened.  No  new  name can  be  added  through  transposition  process. Similarly, existing names cannot be deleted.

  • What procedure should be followed by the Beneficiary Owne r for transposition-cum-dematerialization request?

    The  Beneficiary Owner should  submit  aTransposition  Request  Form  (TRPF)  alongwith the  DRF  and  the  share  certificates  to  his DP.  It should  be  noted  that  a  separate TRPF would have to be filled for each ISIN.

  • What is transmission?

    Transfer  of  Electronic  balances  in  a  Beneficiary Owner’s  account  to  successors  / nominee incase  of  sole  holder account and to the account of surviving joint holders in case of a joint account.

  • What is the significance of transmission in dematerialization?

    Transfer  of  Electronic  balances  in  a  Beneficiary  Owner’s  account  to  successors / nominee in case of sole holder account and to the account of surviving joint holders in case of joint account.