Demat of Shares
Convert Physical Shares to Digital with Expert Help

Convert your physical share certificates into secure digital holdings with our expert Demat of Shares service. Mandatory for most transactions, dematerialisation ensures safe, fast, and paperless share management in compliance with SEBI and MCA regulations. At Udyog Suvidha Kendra, we simplify the process end-to-end—right from documentation to final approval. Start your demat journey today with trusted legal and compliance experts.

Demat of Shares

Key Benefits of Dematerialisation

Paperless Security :Eliminates physical share certificates, ensuring safer digital record-keeping.

Easy Transfer : Enables quick and seamless electronic share transfers and settlements.

Regulatory Compliance :Meets SEBI and MCA mandates for public and private companies.

Cost Efficiency : Saves costs on stamp duty, courier, and manual paperwork.

Faster Transactions : Reduces processing time for buying, selling, or pledging shares.

Reduced Risk : Minimizes chances of loss, theft, forgery, or damage.

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Demat of Shares Application

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Demat of Shares

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  Process of Demat of Shares Registration

STEP 1

  • Fill out the online form with your details.
  • Make the required payment to proceed.
  • Get Call for Further Information, Documents & Advice

STEP 2

  • Submit documents and information if requested.
  • Team will review and validate documents and information.

STEP 3

  • Creation of login credential.
  • Respond to any follow-up from the team.

STEP 4

  • Filing of an Application using the Credentials
  • Government Processing Time

STEP 5

  • Resolution of Queries if any, Raised via Authorities
  • Issuance of Demat of Shares Registration on email.

What is Demat of Shares?

Dematerialisation, commonly known as Demat of Shares, refers to the process of converting physical share certificates into electronic format. This transition allows shareholders to hold and trade shares digitally through a Demat account, eliminating the risks associated with physical documents like damage, theft, or forgery. In today's digitised financial ecosystem, dematerialisation is not just a convenience—it's a necessity for faster, safer, and more efficient trading and record-keeping.

Demat shares are stored with Depository Participants (DPs) under central depositories such as NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited), offering enhanced transparency and regulatory control. Whether you're an investor, company director, or legal heir, understanding and opting for Demat is crucial for seamless ownership and compliance.

Meaning and Importance

Demat of shares enables investors to securely manage their securities without the hassles of physical certificates. The key importance includes:

  • Eliminates Physical Risks: No worries about loss, damage, or tampering.
  • Faster Transactions: Instant electronic transfers instead of days of paperwork.
  • Essential for Liquidity: Mandatory for trading on stock exchanges.
  • Boosts Transparency: Easy tracking, minimal fraud, and audit-ready records.
  • Investor-Friendly: Simplified portfolio management and corporate actions (dividends, splits, etc.).

For both public and private companies, maintaining shares in Demat form boosts credibility, simplifies compliance, and makes future transactions more streamlined.

Importance of Demat

Legal Requirement Under SEBI and Companies Act

Under the Companies Act, 2013, and SEBI regulations, dematerialisation has been made mandatory for various categories:

  • For Public Companies: All listed companies must issue and transfer shares only in Demat form.
  • For Private Companies (Post-2023 Amendments): SEBI mandates that even private companies with a certain threshold must dematerialise shares.
  • For Share Transfers: No transfer of shares (except in case of transmission or inheritance) is allowed unless held in dematerialised form.

Non-compliance can lead to penalties and rejection of share transfers by the Registrar of Companies (ROC). Hence, companies and shareholders must ensure timely demat of their physical holdings.

Legal Requirements

When is Dematerialisation Required?

Dematerialisation of shares is an essential process that can be required in specific situations. Whether for regulatory compliance or convenience, the following scenarios outline when you need to dematerialise your physical shares.

1. Mandatory for Listed Companies

1. Mandatory for Listed Companies

As per SEBI guidelines, listed companies are required to maintain shares only in electronic (demat) format.
Physical share certificates are no longer valid for sale or transfer on stock exchanges.
This requirement ensures regulatory compliance, eliminates risks of loss or forgery, and makes trading seamless and secure.

2. Voluntary for Shareholders of Unlisted Companies

Shareholders holding physical shares in private or unlisted companies can voluntarily choose to dematerialise their holdings.
While not mandatory, converting to demat is highly recommended to simplify record-keeping and avoid issues during future transfers.
Many companies encourage demat to enhance transparency and ease of corporate actions.

2. Voluntary for Shareholders of Unlisted Companies
3. Before Selling or Transferring Physical Shares

3. Before Selling or Transferring Physical Shares

If you plan to sell, gift, or transfer physical shares, dematerialisation becomes mandatory.
Depositories and companies no longer process requests based on physical certificates.
Demat conversion ensures a legally valid, faster, and more efficient transaction process.

Who Needs to Convert Physical Shares to Demat?

Dematerialisation is not only a legal requirement but also a practical necessity for those holding physical share certificates. It simplifies trading, enhances security, and ensures you stay compliant with regulations. The following categories typically need to convert physical shares to demat form:

Shareholders Holding Physical Share Certificates

If you hold paper share certificates, it's important to convert them to demat to ensure security, compliance, and ease of transfer.

  • ● Mandatory for trading: You cannot sell, transfer, or pledge physical shares without converting them to demat form.
  • ● Safety: Demat eliminates the risk of loss, theft, or damage to physical certificates.
  • ● Corporate actions: Allows participation in corporate benefits like dividends, bonuses, and stock splits seamlessly.
Shareholders Holding Physical Share Certificates

Legal Heirs of Deceased Shareholders

Legal heirs of deceased shareholders must convert inherited physical shares into demat for proper legal documentation and to access benefits.

  • ● Legal ownership: Dematerialisation helps confirm legal ownership, enabling the heir to claim dividends, rights, and other benefits.
  • ● Required documents: The process generally requires a death certificate, succession certificate or will, and identity proof of the legal heir.
Legal Heirs of Deceased Shareholders

Investors Planning to Trade or Transfer Shares

If you intend to trade, transfer, or gift your shares, converting to demat is essential for smooth transactions.

  • ● Trading: Stock exchanges require shares to be in demat form for listing, trading, and clearing.
  • ● Transfer: Shares can only be transferred electronically in demat form, making the process faster and more secure.
  • ● Pledging shares: Demat accounts allow shares to be pledged for loans or other financial transactions.
Investors Planning to Trade or Transfer Shares

Documents Required for Demat of Shares

To ensure smooth and legally valid dematerialisation of physical share certificates, the following documents are required. These ensure the identity of the shareholder, ownership proof, and KYC compliance:

1. Dematerialisation Request Form (DRF)

Filled and signed form submitted to the Depository Participant (DP) for converting physical shares to demat.

2. Original Share Certificates

Physical certificates of shares being dematerialised, marked as “Surrendered for Dematerialisation”.

3. Client Master Report (CMR)

Issued by the DP, it contains your Demat account details like DP ID, client ID, and PAN.

4. Self-Attested PAN Card

Mandatory identity proof for all shareholders involved in the demat process.

5. Address Proof

Aadhaar, passport, voter ID, or utility bill (not older than 3 months) for verifying residential address.

6. Passport Size Photograph

May be required by the DP to complete KYC formalities.

7. Death Certificate (if applicable)

Required when dematerialising shares held by a deceased shareholder.

8. Legal Heir/Succession Certificate (if applicable)

Submitted along with the death certificate to establish ownership rights.

9. Power of Attorney/Board Resolution (if applicable)

Needed if the process is being handled by an authorised representative or on behalf of a company.

Step-by-Step Process for Dematerialisation of Shares

Converting physical share certificates to digital form is now essential for seamless trading and compliance. Here’s a simplified and structured guide to help you through the dematerialisation process:

1

Open a Demat Account with a Depository Participant (DP)

Start by choosing a SEBI-registered Depository Participant (DP) such as a bank, stockbroker, or financial institution.

  • Submit your KYC documents (PAN, Aadhaar, proof of address).
  • Sign the agreement and receive your Demat account number (Beneficiary Owner ID).
2

Fill and Submit Dematerialisation Request Form (DRF)

Get the Dematerialisation Request Form (DRF) from your DP.

  • Enter details of each physical share certificate.
  • Ensure your name matches the certificate and the Demat account.
  • Sign the form as required.
3

Submit Original Share Certificates to DP

Attach the original physical share certificates with the DRF.

  • Ensure certificates are not torn, defaced, or disputed.
  • Mention “Surrendered for Dematerialisation” on each certificate.
4

DP Forwards Request to Depository and Company Registrar

Your DP will verify the documents and forward them to the depository (NSDL/CDSL) and the company’s registrar.

  • The request is electronically logged for tracking.
  • Physical documents are sent to the registrar for final verification.
5

Verification and Approval

The company registrar cross-verifies the physical share details with company records.

  • If approved, the registrar informs the depository to credit shares.
  • In case of errors, you may be asked for corrections or additional documentation.
6

Shares Credited to Your Demat Account

    Upon successful verification:

    • The dematerialised shares are credited to your Demat account.
    • You receive a transaction statement from your DP as proof.
    • You can now trade, hold, or transfer these shares digitally.

Timeline and Government Charges

Understand the complete timeline for dematerialisation and get clarity on applicable charges. Know how long the process takes, what fees may be charged by your Depository Participant (DP), and how to avoid unnecessary delays in converting your physical shares to Demat

Dematerialisation Timeline Illustration

How Long Does Dematerialisation Take?

The dematerialisation process typically takes 7 to 21 working days, depending on how quickly the documents are verified by the Depository Participant (DP), the depository (NSDL/CDSL), and the Registrar and Transfer Agent (RTA). Any discrepancies in the application or documents can lead to delays. It's important to ensure all forms are correctly filled and all necessary documents are submitted upfront to avoid processing issues.

How Long Does Dematerialisation Take?

The dematerialisation process typically takes 7 to 21 working days, depending on how quickly the documents are verified by the Depository Participant (DP), the depository (NSDL/CDSL), and the Registrar and Transfer Agent (RTA). Any discrepancies in the application or documents can lead to delays. It's important to ensure all forms are correctly filled and all necessary documents are submitted upfront to avoid processing issues.

Charges by Depository Participants (if any)

While the SEBI regulations do not mandate fixed charges, most DPs levy nominal fees for processing dematerialisation. Here’s what you may expect:

  • Dematerialisation Fee: ₹5 to ₹25 per certificate (varies by DP)
  • Courier or Handling Charges: ₹50 to ₹100 (if applicable)
  • Account Maintenance Fee: Charged annually by some DPs for maintaining your Demat account

Note: Some DPs offer free or discounted demat services under promotional offers or zero AMC (Annual Maintenance Charges) plans.

Charges Illustration

Charges by Depository Participants (if any)

While the SEBI regulations do not mandate fixed charges, most DPs levy nominal fees for processing dematerialisation. Here’s what you may expect:

  • Dematerialisation Fee: ₹5 to ₹25 per certificate (varies by DP)
  • Courier or Handling Charges: ₹50 to ₹100 (if applicable)
  • Account Maintenance Fee: Charged annually by some DPs for maintaining your Demat account

Note: Some DPs offer free or discounted demat services under promotional offers or zero AMC (Annual Maintenance Charges) plans.

Legal Rules & SEBI Guidelines

Demat Mandate for Share Transfers

As per SEBI regulations, physical share certificates cannot be transferred unless they are converted to Demat form. This mandate applies to all listed companies, making dematerialisation compulsory before executing any sale, transfer, or trading of shares. This rule enhances transparency and prevents fraudulent activities in the securities market.

Role of Depositories – NSDL and CDSL

India has two major depositories – National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) – which hold securities in electronic form. Registered Depository Participants (DPs) act as intermediaries between investors and these depositories, ensuring secure and efficient Demat services.

Penalties for Non-Demat Holdings (if applicable)

Failure to dematerialise shares can lead to a range of issues including refusal of transfer, ineligibility to sell, and limitations in participating in corporate actions like dividends and bonuses. SEBI and company-specific policies may also impose penalties or restrictions for holding physical shares beyond the deadline.

Common Issues During Demat and
How to Avoid Them

Signature Mismatch or Missing Documents

Signature mismatch between share certificates and the Demat request form (DRF) is a common reason for rejection. Ensure your current signature is updated with the company registrar. Always double-check and attach all required documents while submitting your DRF.

Invalid or Torn Share Certificates

Old or damaged share certificates often get rejected. If certificates are torn, faded, or illegible, apply for duplicate certificates from the issuing company before proceeding with the Demat process to avoid unnecessary delays.

Name Mismatch Between Certificate and PAN

If your name appears differently on the share certificate and PAN card (e.g., spelling errors, missing initials), your Demat request may be rejected. Provide a notarized affidavit, name change proof, or additional ID documents to reconcile discrepancies.

Common Demat Issues

How Udyog Suvidha Kendra Helps

1
End-to-End Demat Assistance

From opening a Demat account to coordinating with DPs and registrars, we manage the entire dematerialisation journey. Our team ensures proper documentation, error-free filing, and status tracking till completion.

2
Quick Verification & Submission Support

We help you validate documents, match signatures, and compile all necessary paperwork. With our expert assistance, common errors are avoided, and your Demat request gets processed without rejection or delay.

3
Affordable and Transparent Pricing Plans

Our service plans are designed to suit all investor categories, with zero hidden charges. Whether you're a first-time investor or handling inherited shares, we offer reliable support at a cost-effective price.

Demat of Shares Registration FAQs

What is Dematerialisation of Shares?
Dematerialisation is the process of converting physical share certificates into electronic format. This ensures secure, paperless transactions and is mandatory for all listed company shares as per SEBI guidelines.
Yes, it’s mandatory for shareholders of listed companies. Share transfers are not allowed in physical form, so holding shares in Demat form is a legal requirement under SEBI regulations.
No, you must convert physical shares into Demat form before selling or transferring them. SEBI has banned the transfer of physical shares since April 2019 for listed companies.
Any individual, HUF, company, or trust with a valid PAN and KYC-compliant identity/address proof can open a Demat account through a registered Depository Participant (DP).
A Depository Participant is an intermediary registered with NSDL or CDSL. DPs handle the process of opening Demat accounts and submitting your share certificates for dematerialisation.
You need a Demat Account, Dematerialisation Request Form (DRF), original share certificates, PAN card, address proof, and bank details. Additional documents may be required for name or signature mismatch.
The dematerialisation process typically takes 15 to 30 working days, depending on the depository participant and verification by the company’s registrar and transfer agent (RTA).
Some Depository Participants may charge nominal fees for opening the Demat account or for processing Demat requests. Charges vary by provider and are generally affordable.
If the certificate is damaged or illegible, you must first apply for a duplicate share certificate from the issuing company before proceeding with Dematerialisation.
Submit a recent bank verification or notarized affidavit along with your DRF. If needed, you may have to update your signature with the company registrar before Demat.
Yes, legal heirs can dematerialise inherited shares by submitting a succession certificate or legal heir proof, along with the share certificates and KYC documents.
Yes, a Demat account can be opened with joint holders. The order of names must match the share certificate exactly to avoid rejection of the Demat request.
Once processed, your shares are credited to your Demat account in electronic format. You can view them online, transfer them digitally, or sell them via your stockbroker.
Yes, you can track the status of your Demat request by contacting your DP or checking the tracking portal provided by NSDL/CDSL or the RTA.
We offer complete Demat support, from opening accounts to document verification and filing. Our experts ensure smooth, quick, and error-free processing at affordable prices.