Holding Physical Share Certificates? Here's How to Convert Them into Demat Form

The move, as earlier reported by LiveLaw Biz helps investors regularise legacy paper holdings that remain outside the demat framework.

The special window will remain open from February 5, 2026 to February 4, 2027, enabling such investors to regularise and complete transfer cum dematerialisation of their securities. The regulator said this step would facilitate investors in getting rightful access to their investments.

For years, physical share certificates have existed as relics of an earlier financial system. While dematerialisation has been mandatory for most transfers, many investors continue to hold paper certificates issued decades ago.

These certificates carry risks of loss, forgery, damage, and procedural complications. The new window seeks to eliminate those vulnerabilities by bringing such holdings into electronic custody.

Dematerialised shares are held through depositories such as National Securities Depository Limited and Central Depository Services Limited. Instead of paper evidence, ownership exists as a secure digital entry.

The dematerialisation process is governed by the Depositories Act, 1996 and SEBI's Depositories and Participants Regulations, 2018, along with operational guidelines issued by NSDL and CDSL.

Below is the step-by-step process for converting physical shares into demat form:

Step 1: Open a Demat Account

An investor must open a demat account with a Depository Participant (DP), such as a registered bank or broker affiliated with NSDL or CDSL.

The account opening process requires submission of PAN, Aadhaar, proof of address, and bank details. The investor must also execute an agreement with the DP. Without a demat account, electronic credit of shares is not possible.

Step 2: Obtain and Fill the Dematerialisation Request Form (DRF)

The investor must collect a Dematerialisation Request Form from the DP.

The DRF must be carefully completed with accurate details of each share certificate, including:

Company nameCertificate numberDistinctive numbersNumber of shares

The name and signature on the DRF must exactly match the details recorded on the physical certificate and in the company's records. Even minor discrepancies can trigger delays.

Step 3: Submit Physical Certificates and DRF

The original share certificates must be attached to the completed DRF.

Each certificate should be clearly marked with the words “Surrendered for Dematerialization.”

The documents are then submitted to the DP for processing.

Step 4: Verification by Depository Participant

The DP verifies:

Completeness of the DRFAuthenticity of the certificatesSignature consistency

If satisfied, the DP forwards the request electronically to the company's Registrar and Transfer Agent (RTA).

Step 5: Processing by Registrar / Issuer

The RTA cross-checks the details against company records.

If the information matches and no discrepancies are found, the dematerialisation request is approved.

If mismatches exist - such as signature variation, damaged certificates, or incomplete data - the request may be returned for correction.

Step 6: Credit to Demat Account

Once approved, the shares are electronically credited to the investor's demat account.

Confirmation is issued by the DP. The physical certificates are cancelled and cease to have legal validity.

Timelines

The process typically takes two to four weeks.

Delays may occur if certificates are damaged, signatures do not match historical records, names have changed, or documentation is incomplete.

If ownership exists only on paper, it is time for old school investors to bring it into the electronic age, where records are secure and traceable.