The modern, secure way to hold and trade securities in electronic form. Eliminate paperwork and reduce risks with dematerialized shares.
Dematerialization (Demat) is the process of converting physical share certificates into electronic form, which are held in a Demat account with a Depository Participant (DP).
This electronic form of holding securities was introduced in India in 1996 with the establishment of NSDL (National Securities Depository Limited) and later CDSL (Central Depository Services Limited).
The transition from physical to electronic shares was driven by several challenges in the traditional system that needed modern solutions.
Physical share certificates were prone to loss, theft, forgery, and damage. Transfer process was time-consuming (4-6 weeks) with high stamp duty costs.
SEBI mandated dematerialization for all publicly traded companies to bring transparency, reduce fraud, and modernize India's capital markets.
The growth of digital infrastructure enabled secure electronic record-keeping and instant transfers, making physical certificates obsolete.
Investors wanted faster settlements, easier corporate actions (dividends, bonuses), and portfolio tracking in one place.
Eliminates risks of loss, theft, or damage to physical certificates. Electronic records are securely maintained by depositories.
Shares can be transferred instantly without paperwork. Settlement time reduced from weeks to just 2 days (T+2).
Eliminates stamp duty on transfers and reduces brokerage fees. No need for storage or insurance of physical certificates.
All holdings in one account with real-time updates. Simplifies tracking of investments and corporate actions.
Eliminates fake/forged certificates. Each transaction is electronically authenticated and recorded.
Brings India at par with international markets where dematerialization is the norm for securities trading.
Select a Depository Participant (bank, broker, or financial institution registered with NSDL/CDSL).
Complete the account opening form and submit KYC documents (PAN, Aadhaar, address proof).
Sign the DP-Client agreement that outlines rights and obligations of both parties.
Get your Demat account number (16-digit BO ID) and login credentials.
Submit physical certificates with Demat Request Form (DRF) to convert to electronic form.
Link with trading account to buy/sell securities electronically.
| Feature | Physical Shares | Demat Shares |
|---|---|---|
| Form | Paper certificates | Electronic records |
| Safety | Risk of loss/damage | Secure electronic holding |
| Transfer Time | 4-6 weeks | 2 days (T+2) |
| Transfer Cost | Stamp duty + high brokerage | Nominal DP charges |
| Corporate Actions | Manual process | Automatic credit |
| Trading | Not allowed | Mandatory for trading |
Yes, SEBI has made it mandatory for all investors to dematerialize their shares if they wish to trade on stock exchanges. However, physical shares can still be held but cannot be sold without converting to demat form first.
Demat accounts typically have: Annual maintenance charges (₹300-800), transaction charges (₹5-25 per transaction), and custodian fees for physical shares. Many DPs offer zero-AMC accounts with certain conditions.
Yes, through a process called rematerialization by submitting a Remat Request Form (RRF) to your DP. However, this is rarely done as physical shares cannot be traded on exchanges.
Typically 15-30 days from submission of physical certificates with DRF to your DP. The time depends on verification by both DP and the company's registrar.
Dividends are automatically credited to your linked bank account. Demat eliminates the need to submit physical dividend warrants and reduces the chance of missing payments.
Contact us directly via WhatsApp for quick assistance with your Demat account opening or share dematerialization process.