December 10, 2019

Dematerialisation of shares: How, What, When & Why?

Neeraj Bahal
Founder, Fasttrack Financial Planners

Dematerialisation of shares: How, What, When & Why? 

Understand with the help of Scenarios



The Securities and Exchange Board of India (SEBI) has amended relevant provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to disallow companies from accepting a request for transfer of securities which are held in physical form with effect from April 1, 2019.


Post 1st April 2019 if anyone is holding shares of companies in physical form which are trading on the exchange, there is no choice but to dematerialise them in order to sell or transfer the securities.

One can continue to hold shares and other types of securities in physical form even after April 1, 2019 but will not be able to lodge the shares with a company or its registrar and transfer agent (RTA) for further transfer of securities.

However, after the end of SEBI deadline requests for transmission and transposition of securities in physical form only will be accepted by listed companies or their RTAs.

It also means that a person who is the owner of shares can continue to hold them in physical form if he or she does not want to dematerialise them.


Scenario 1: You have valid share certificates and all holders are alive:

The first step is to open a Demat account if you do not already have one. The Demat account will have to be opened in the names of all the holders of the shares in case of shares which are held jointly and the order of holding (first and second) in the Demat account will have to be the same as that of the shares.

What is a valid share certificate?

It is important to understand what a valid share certificate is:

  1. Face Value on the certificate must be the latest- Some of the companies are sub-dividing their equity shares of higher value into smaller value.
  1. The name of the Company must be as per what is mentioned in the shares certificate In some cases the company name might change due to the company’s internal effect i.e. Merger/demerger/amalgamation etc..
  1. Do check whether there is any Bonus/split of shares declared by the company.

(All these information you can check on or

Scenario 2: You do not have the valid share certificates and the shareholder is alive

There could be 2 possibilities for loss of Certificates:

  1. Undelivered – The certificate might be with the company, in case of change of address the certificate is returned to the company. If the Certificates are with the respective companies, they will resend them.
  1. Loss of Certificates – if the company does not have the certificates, then you will have to apply for duplicate Certificates.  (Applicable for all the above three companies)

Process for Obtaining Duplicate Share Certificates:

The company requires the following:

  • Indemnity Bond on a Non-Judicial Stamp Paper, as per Mumbai Stamp Act. For Loss of shares.
  • Affidavit on Non-Judicial stamp Paper, duly Notarized.
  • Advertisement in News Papers. (If required).
  • Copy of F.I.R. lodged with Police Dept. for loss of shares.

Scenario 3: You have the share certificates and the shareholder is deceased

This Procedure is called Transmission – In which securities of a deceased account holder are transferred to the account of his legal heirs/nominee.

Procedure to be followed by the claimant

Legal heirs/nominee/claimant must independently correspond with each company in which securities are held along with the following supporting documents.

  • Death Certificate.
  • PAN and Aadhaar of Claimant.
  • Specimen Signature of Successor etc., dependent upon various circumstances may perhaps be considered essential for transmission by the Company.
  • Original Share certificate.

And anyone of the below mentioned documents (If the Market Value of the shares exceeds 2 Lakhs)

  • Succession certificate / Copy of probated will / Letter of Administration

In some cases, at time of transmission, the beneficiary can submit the Client Master Form containing Demat account where the shares are to be transmitted so that the beneficiary gets shares directly in Demat mode.

On receipt of the above documents, Registrar and Transfer Agent (RTA) shall send the draft of affidavit/indemnity bond / no-objection to be executed on a non-judicial stamp paper of requisite value and furnished by the legal heir.

If you do not have the original share certificate then you have to do duplicate cum transmission procedure simultaneously.

Where shares are held in joint names, have to submit a certified copy of the death certificate of the deceased shareholder at the registered/corporate office or to Registrar and Share Transfer Agent of the Company, along with the share certificates so that the name of the deceased can be deleted from the Company’s records as well as the share certificates.


Sometimes people get confused between shares to have been transferred in an unclaimed suspense account and in Investor Education and Protection Fund account.


In accordance with the procedure, the Company shall transfer unclaimed shares as on 31.07.2017 into one folio in the name of “Company Name —Unclaimed Suspense Account” and shall dematerialize the shares and maintain details of shareholders whose shares are credited to the said Unclaimed Suspense Account.

In case of any Shareholder, who approaches the Company/ RTA after 31.07.2017 for claiming the shares concerned, the Company shall after proper verification of the Identity of the Shareholder either credit the respective shares to the Demat account of the shareholder from the Unclaimed Suspense Account to the extent of the shareholders entitlement or deliver the physical certificate after re-materializing the same as opted for by the shareholder.


MCA has issued Investor Education and Protection Fund Authority Rules, 2017. As per these rules “Any money as a dividend not claimed by the investor within 7 years and 37 days from the date of declaration of dividend, shall be transferred by the company along with interest accrued, if any, thereon to Investor education and protection fund.

After 2017 even all Shares in respect of which dividend has not been paid or claimed for seven consecutive years or more have been transferred by the company in the name of Investor Education and Protection Fund (IEPF). There is a separate online procedure that has to be done to claim the dividend and shares from IEPF.

First and foremost you have to make sure if the shares are in IEPF by enquiring with the registrar by using any of the above-mentioned ways. Once confirmed then start with the process at the earliest.

It is tedious which involves regulatory compliances to be done. The shareholder has to make an application in e-form IEPF 5 and mention all the details of shares and pending dividends a file with the Ministry of corporate affairs (MCA) and the company.  This process of such transfer/transmission/deletion takes more than 1 year and the shares are directly transferred to the demat account.


  • Write a request letter to the company for the Entitlement of shares that have been transferred to IEPF along with requisite documents.
  • After verifying all the documents, the Company will issue an “Entitlement letter” to claim the shares from the IEPF account along with a detailed checklist.
  • Download the form IEPF-5 from the website of IEPF ( for filing the claim for a refund.
  • After filling the form save it on your computer and submit the duly filled form by following the instructions given in the upload link on the website. On successful uploading, an acknowledgment will be generated indicating the SRN. Please note the SRN for future tracking of the form.
  • Take a printout of the duly filled IEPF-5 and the acknowledgment issued after uploading the form.
  • Along with form IEPF 5, you need to submit the below documents as well.
  • Indemnity Bond (original) with the claimant signature (As per format is given in Annexure-II) to be executed on a non-judicial Stamp Paper of the value as prescribed under the Stamp Act (According to state)
  • Advance Stamped receipt (original) with the signature of the claimant and two witnesses. (Format is given at Annexure I)
  • Copy of Aadhaar Card of the claimant and if joint holders are there, Copy of Aadhaar card of all the joint holders.
  • Proof of entitlement (certificate of Share/Interest warrant/dividend warrant, Application No., etc.)
  • Original Cancelled Cheque leaf.
  • Copy of Passport, OCI and PIO card in case of foreigners and NRI
  • Copy of PAN Card (mandatory in case of a claim for shares)
  • Client Master List of De-mat A/c of the claimant
  • In case any Joint holder is deceased, Copy of Death certificate to be attached.
  • Other optional documents, (if any)


  • Address: You should be very careful while filing the address part. The applicant should mention here the address which has been registered with the company. There might be changes that the address as per Aadhaar and registered with the company gets differ in this case you need to submit an affidavit for Change/update of address along with an attested copy of new and old address proof.
  • In the case of NRI Status:  Proof of presence in India while signing the indemnity bond and advance receipt in India is mandated. In this scenario, you may submit your VISA copy to them in advance on which date of arrival has been mentioned.

General things to remember


Nowadays, determine the outstanding amount of dividend become easier you can directly search on the company’s site. Where you find the Investor services tab in that you can search all the details related to your holding as well. To claim such amounts we need to follow the below procedure:-

  • Request letter:A request letter should be made to the company’s registrar and transfer agent (RTA). It should mention the folio number in case of physical shares, or depository participant ID and client ID, and the period for which dividend has not been received. If the shares are held jointly, it should be signed by all shareholders.
  • Along with the request letter, provide the outdated dividend warrant, if available, the client master list reflecting the current shareholder details for shares held in the demat form, Self-attested identity proof i.e PAN card/Passport copy as well as an indemnity bond in the format prescribed by the company.


Once the process is done and you receive the shares in physical form, one has to fill in a DRF (Demat Request Form) which is available with the DP  Depository participant that is your broker and submit the same along with physical certificates that are to be dematerialized. Separate DRF has to be filled for each ISIN. The complete process of dematerialization is outlined below:

  • Surrender certificates for dematerialisation to your DP along with identity proofi.e PAN card.
  • DP intimates to the Depository regarding the request through the system.
  • DP submits the certificates to the registrar of the Issuer Company.
  • Registrar confirms the dematerialisation request from the depository.
  • After dematerialising the certificates, Registrar updates accounts and informs the depository regarding the completion of dematerialisation.
  • The depository updates its accounts and informs the DP.
  • DP updates the demat account of the investor.


One response to “Dematerialisation of shares: How, What, When & Why?”

  1. Very well written Neeraj!

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