If you have old physical share certificates and are trying to understand what dematerialisation means and what it involves, this guide covers everything — from the basic definition to the exact steps, fees, and common problems.
By RK Gupta, Company Secretary · Updated June 2026 · 12 min read
Dematerialisation, at its simplest, means converting physical paper share certificates into electronic form. Once done, you no longer hold a printed certificate — instead, the shares are credited as an electronic balance in a demat (dematerialised) account that you open with a broker or bank.
The word itself comes from "de" (removing) and "material" (the physical paper). Before dematerialisation became widespread in India, every shareholder received paper certificates issued by the company. These certificates stated your name, the folio number, distinctive numbers of the shares, and the number of shares held. Storing, tracking, and transferring them was cumbersome — certificates got lost, damaged, forged, or simply went missing over decades.
Today, when SEBI or a financial advisor says "demat your shares," this is what they mean: surrender your physical certificates to an authorised entity and have the equivalent number of shares reflected electronically in your demat account.
SEBI first permitted dematerialisation of shares in 1996 when it established the two national depositories — NSDL and CDSL. For several years, holding shares in demat form was optional. Trading on stock exchanges moved to compulsory demat mode progressively from 1997 onward, with listed equity shares eventually covered fully by 2002.
The critical rule change came through SEBI Circular SEBI/HO/MIRSD/DOS3/CIR/P/2018/139 dated November 6, 2018. This circular, effective from April 1, 2019, made it mandatory that any transfer of securities of listed companies must happen only in demat form. From that date, if you want to sell or transfer physical shares in any listed company, you cannot do so — the transfer would be rejected by the RTA.
What this means practically: you can still hold physical shares, they do not become void, and you remain the registered shareholder. However, you cannot sell them on the stock exchange, and any transfer deed submitted for offline transfer will be returned. To trade or transfer these shares, dematerialisation is the only route.
SEBI has also tightened KYC requirements for existing physical shareholders. Circular SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/37 issued in March 2023 directed RTAs to freeze folios that have not completed KYC — meaning if your folio does not have a linked PAN, nominee, email, phone, and bank account on record, the folio gets "frozen" and you cannot even receive dividends or bonus shares into it properly.
India has two national depositories. NSDL (National Securities Depository Limited) was incorporated in August 1996 and is promoted by NSE, IDBI Bank, and Unit Trust of India. CDSL (Central Depository Services Limited) was incorporated in February 1999 and is promoted by BSE along with several public and private sector banks.
Both depositories hold electronic records of shares. Every demat account you open is linked to one of these two. Your broker or bank — formally called a Depository Participant or DP — is an intermediary registered with either NSDL, CDSL, or both. When you open a demat account with HDFC Bank or Zerodha, for instance, you are opening an account in the CDSL system. ICICI Bank offers accounts with both. Kotak Securities connects to both as well.
For dematerialisation purposes, it does not matter which depository your account belongs to. As long as the company's shares have a valid ISIN in the depository system, you can demat them through your account.
Every listed company's shares are assigned an ISIN (International Securities Identification Number) — a 12-character alphanumeric code like INE009A01021. This ISIN is what links your physical certificate (which carries a certificate number, folio number, and distinctive numbers) to the electronic system. You can verify ISINs on NSE's website at nseindia.com or BSE's at bseindia.com by searching the company name.
Here is how the process actually works from start to finish:
There is no single uniform fee structure. Charges vary by DP, and some components are fixed while others depend on how many certificates or folios are involved. Here is a realistic breakdown:
Most DPs have moved to zero account opening charges. Zerodha, Groww, Angel One, and most discount brokers charge nothing to open a demat account. Full-service brokers and banks may charge between ₹0 and ₹750.
This is the yearly charge for maintaining your demat account. Zerodha charges ₹300 per year (billed quarterly). HDFC Securities charges around ₹750 per year. ICICI Direct charges around ₹700 per year. Some brokers waive AMC for the first year. Government-owned DPs like SBI Securities also charge in the ₹400–500 range annually.
This is what the DP charges to process your DRF. Typical range is ₹50 to ₹150 per request or per certificate, plus applicable GST at 18%. Some DPs charge per certificate, others per ISIN, and others a flat fee per demat request regardless of quantity. Check your DP's schedule of charges before submitting.
The RTA typically charges around ₹50 per certificate as a dematerialisation processing fee, which is usually recovered from the DP and may or may not be passed to you depending on your DP's billing structure.
Your DP will send the original certificates to the RTA by courier. Expect to pay ₹50 to ₹150 in courier and handling fees, again varying by DP.
To give a practical example: if you hold 500 shares of an old company in one certificate and submit a single DRF, the total outlay including DP processing, RTA fee, and courier is typically ₹150 to ₹350 in one-time costs, plus the annual AMC going forward.
Keep these ready before approaching your DP:
If the shares are held jointly (two or three names), all joint holders must sign the DRF in the same order as their names appear on the certificate.
This is one of the most common situations we see. Someone finds old certificates of a company called, say, "Hindustan Lever Limited" or "Larsen & Toubro Finance" or "TISCO" — and wonders whether these can still be dematerialised.
The short answer is yes, as long as the company or its successor entity is still listed. When companies merge, change names, or get acquired, the surviving entity gets a new or updated ISIN in the depository system. The old physical certificates carry the old company name, but the RTA has records linking old certificates to current folios.
Before submitting your DRF, do two things: first, look up the old company name on NSE or BSE to find what it is currently called and what its present ISIN is. Second, call or email the RTA to confirm they have records against your folio number and certificate numbers. This saves you a rejection. Both KFintech and MUFG Intime have helplines and email support for this type of query.
If the company is delisted or dissolved without a surviving entity, those shares may have no ISIN — in which case dematerialisation is not possible and the certificates may have no realisable value.
You cannot dematerialise a share certificate you do not physically possess. The original certificate must be surrendered and physically defaced. If your certificate is lost, stolen, or destroyed, you must first apply to the company's RTA for a duplicate share certificate before dematerialisation can begin.
Getting a duplicate certificate typically involves filing an FIR with the police, publishing a newspaper notice in a local and national daily, submitting an indemnity bond, and paying a fee set by the RTA (usually ₹100 to ₹500 per certificate). The process takes 30 to 45 working days after the RTA receives all documents. Our Lost Share Certificate service covers this end to end — we prepare all the documents and coordinate with the RTA on your behalf.
If the original shareholder has passed away, the physical shares must first be transmitted to the legal heir or nominee before dematerialisation can happen. Transmission is a separate legal process that involves submitting a succession certificate, legal heir certificate, or probated will to the RTA depending on the value of shares and whether a nominee was registered.
You cannot directly submit a DRF in your own name for shares still registered in a deceased person's name — the RTA will reject it. Transmission must happen first, the folio gets updated in your name, and then you can demat. Our Share Transmission service helps families navigate this process without errors that cause delays.
The name on your share certificate may not exactly match your PAN or Aadhaar. Minor spelling differences — an extra initial, middle name variation, or abbreviated surname — cause RTA rejection. You will need to submit Form ISR-4 with supporting documents to get the name corrected in the RTA's records before the demat request can succeed. Our Share Name Correction service handles this.
The signature on your DRF must match the specimen signature the company has on record for your folio. Signatures change over decades. If the RTA's verification team flags a mismatch, you will need to submit a fresh signature attestation through Form ISR-4, with bank attestation or notarization of the new signature.
If the company is delisted, merged without ISIN continuity, or was a private company that never had an ISIN, the depository system will not have a record for that scrip. In such cases, dematerialisation is not possible and you will need to explore other options like an off-market transfer or sale through the special window SEBI has for physical share settlement.
Since SEBI's 2023 circular, RTAs are freezing folios with incomplete KYC. If your folio is frozen, the RTA will reject your demat request even if all the paperwork is correct. Unfreezing requires submitting the KYC update documents (PAN, Aadhaar, bank details, email, phone, nominee) through Form ISR-1 or ISR-4 to the RTA directly.
Dematerialisation is not only for listed company shares. The Ministry of Corporate Affairs (MCA) has also brought private companies into the demat framework. Under Rule 9B of the Companies (Prospectus and Allotment of Securities) Rules, 2014 — as amended in 2023 — all private limited companies (other than small companies) were required to facilitate dematerialisation of their shares by September 30, 2024. Existing shareholders of such companies are expected to hold shares in demat form for any future transfer or subscription.
Private company share dematerialisation follows the same basic process — open a demat account, get an ISIN allotted through NSDL/CDSL (which the company must apply for), submit a DRF — but there are additional steps at the company level to enable this. If you hold shares in a private company and want to sell or transfer them, check with the company's board and their RTA whether they have completed the ISIN application. Without an ISIN, the DP cannot process your demat request.
Investor Helpdesk provides documentation support and process guidance only — not legal or investment advice. We help individual investors prepare and submit the correct paperwork to RTAs and DPs. For legal questions about ownership, succession, or taxation of shares, please consult a qualified lawyer or chartered accountant.
Questions Indian investors ask about dematerialisation of physical shares
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