Demat of Shares
Dematerialisation (popularly ‘demat’) is the process of converting physical shares into electronic format. An investor who wants to dematerialise his shares needs to open a demat account with a Depository Participant (DP). Investor surrenders his physical shares and in turn gets electronic shares directly in his demat account. Under the current provision, dematerialisation of promoter shareholding is mandatory while non-promoter investors have an option to hold securities either in physical or demat form.
Why do you need a demat?
A retail investor can hold shares in physical form, but cannot trade. For trading (buy or sell) of shares, an investor has to have a demat account.
Demat is safe and convenient as it reduces risk of holding shares in physical form, reduces paperwork, ensures immediate transfer and eliminates bad deliveries.
It eliminates transit losses relating to benefits such as dividends, bonuses, stock split, rights as these are automatically transferred into demat.
Any update with depository gets automatically registered with all companies in which investor holds securities eliminating the need to correspond with each of them separately.
How We Can Help You?
Here are a few problems that a shareholder often faces. We help such problems and help investors to convert physical shares to demat:
Dormant demat account:
Demat account of an investor may become dormant due to inactivity for a long time. This frequently happens with passive investors who adopt a ‘buy and forget’ approach. This may also happen with an investor who opens new demat account without transferring shares to it from old account. In such cases, the investor faces problems in trading, transfer and transmission of shares.
Lack of updated information
An investor has changed address, but the details are correspondingly not updated with the depository participant or the company, resulting in a mismatch with the shareholder’s database. In this case, the investor may lose benefits such as dividends, bonus, split shares, rights issues etc.
Loss of demat details
For some reasons, a shareholder may loss his demat details, resulting in complete lack of communication with the company and depository participant.