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How To Dematerialize Physical Shares?

Mr. C.S. Sudheer | Posted On Friday, October 14,2016, 07:36 PM

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How To Dematerialize Physical Shares?



When buying shares, ask yourself, would you buy the whole company?

-    Rene Rivkin

Investing in shares, is all about doing your research. You need to buy the right shares, at the right price. Then comes the good part…..Your money grows and grows. You have been investing in shares, for the past two decades. You are familiar with those sheets of paper called share certificates, which signify your investment, in shares of a Company. You have several of these sheets (share certificates), lying in your cupboard, yellowing with age. Some of these share certificates, look like they can tear, any day. Imagine the headache if your share certificates are stolen, destroyed, lost or forged? Is there a way out of this mess?

Yes there is and it is called dematerialization.  Dematerialization, popularly called demating of shares, is the process of destroying physical share certificates and retaining ownership of your shares, in electronic form. Today, most of the shares are traded in the demat form. Shares in demat form, can easily be sold by your broker. No stamp duty is payable on the transfer of your dematted shares. Are your shares dematerialized? They cannot be lost, stolen, destroyed or forged. Selling shares is pretty easy.’s commitment is to help you “Save, Invest, Spend and Borrow Consciously.” To avail free financial advice/education from, all you need to do is, just leave a missed call on financial education helpline 02261816111 or just post a request on website. 

see also: Retirement Tax Benefits - EPF, VPS, PPF, Mutual funds, SIPs and NPS

How To Dematerialize Physical Shares?

  • Open a demat account. You need to open a beneficiary account (BO), with a depository participant, popularly called DP. A depository participant is an agent, who interacts with the depository. Your bank can be a depository participant. The depositories in India are the NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited). What is this depository? Oh…it’s just an organization, which holds your shares, debentures, bonds, mutual fund units and so on.
  • You approach the depository participant. You then fill a demat account opening form. You have to sign an agreement with the depository participant. Submit proof of identity such as PAN card and an identity proof/address proof, such as Passport copy. (Your demat account, should be in the same name as the ownership in physical form).
  • Once your demat account is opened, your shares can be demated, by filling a Dematerialisation Request Form (DRF). You then submit/surrender the certificates of the shares which you want dematerialized, along with the dematerialisation Request Form (DRF), to the depository participant.
  • The depository participant then sends a request, through an electronic system, to the Registrar and Transfer agent. (R&T agents maintain your /investor’s records, for convenience).
  • The electronic system generates a Dematerialisation Request Number (DRN). This DRN number, is entered on the Dematerialisation Request Form (DRF) and is sent along with physical documents (identity and address proof / share certificates), to the Registrar and Transfer agent, along with a standard covering letter.
  • Your share certificates are received by the Registrar and Transfer agent. These share certificates will be mutilated and the words “Surrendered for Dematerialisation”, will be written on it.
  • The Registrar and Transfer agent will verify the physical documents, along with the details in the covering letter and the Dematerialisation Request Form.
  • The Company where you own shares, has your name in the Register of Members (RoM), of the Company. Your name is replaced by the depository’s name in the Register of Members (RoM), of the Company, to the extent of shares, which have been dematerialized.
  • Once the Register of Members (RoM), of the Company where you have shares, has been amended, a confirmation is sent to the depository.
  • Your demat account with the depository participant (DP), is credited with the dematerialized shares.

See also: How To Open Demat Account?

So why are you waiting? Simply get your physical shares dematerialized. Then just sit back and watch your money grow.

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