The equity shares of the company are under compulsory demat trading by all investors. Shares are available for demat with both the depositories in India — National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL).
Considering the following advantages available for dematerialized holding and scrip less trading, shareholders holding shares in physical form should consider dematerialization of their holding.
1.No stamp duty for transfer of securities in the Depository System. In the case of physical shares, stamp duty of 0.25% of sale value is payable on transfer of shares.
2.Elimination of bad deliveries and all risks associated with physical certificates such as loss in transit, theft, mutilation, damage, etc.
3.Facility for freezing/locking of investor accounts to make it non-operational for specified period.
4.Facility to pledge and hypothetic securities. Pledging Dematerialized securities is easier and advantageous as compared to pledging physical shares.
Dematerialization of shares: Shareholder(s) who want to hold shares in demat form should open a demat account with a depository participant (DP) registered with either NSDL or CDSL, and then surrender their share certificate(s) for dematerialization to the company through the DP. List of DPs registered with NSDL and CDSL is available on their respective websites.
Steps involved in dematerialization of shares:
5.Shareholder fills out a Dematerialization Request Form (DRF) and surrenders the defaced share certificate (s) along with the DRF to the DP
6.The DP intimates the company of this request through the system of NSDL/CDSL.
7.The DP submits the share certificate(s) and the DRF to the company.
8.The company updates the Register of Members and then validates the request.
9.The Depository credits the DP's account.
10.The DP updates the investor's demat account and informs the shareholder
Rematerialisation of shares:
Under the depository system, there is provision for rematerialisation of shares i.e. reconversion of dematerialized shares into physical shares. Steps involved in Rematerialization of shares:
11.Beneficial owner fills out a Rematerialisation Request Form (RRF) and submits the same to the DP.
12.DP intimates the Registrar and Share Transfer Agent of this request through the system of NSDL/CDSL.
13.DP submits the RRF to the Registrar and Share Transfer Agent.
14.The Registrar and Share Transfer Agent updates the Register of Members and confirms the request through the system of NSDL/CDSL.
15.The Registrar and Share Transfer Agent prints the share certificate and dispatches the same to the shareholder by registered post.