Written by Upstox Desk
5 min read | Updated on September 26, 2025, 14:21 IST
The Process of Dematerialisation of Shares
The Benefits of Dematerialisation
Importance of Dematerialisation
Upstox is a leading Indian financial services company that offers online trading and investment services in stocks, commodities, currencies, mutual funds, and more. Founded in 2009 and headquartered in Mumbai, Upstox is backed by prominent investors including Ratan Tata, Tiger Global, and Kalaari Capital. It operates under RKSV Securities and is registered with SEBI, NSE, BSE, and other regulatory bodies, ensuring secure and compliant trading experiences.
We’ve talked about demat accounts in previous posts, and about the pre-demat era when securities were held in ‘paper certificates’ instead of the electronic form they are stored in today. It was truly a very different time - one that came with multiple difficulties - such as delays, storage issues and many more.
To alleviate the risk associated with trading of securities in paper format, the concept of dematerialization was introduced in the Indian share market. Securities would now be traded and stored in a ‘dematerialised’, or electronic format. Through the dematerialization or “demat” process, you can convert your physical paper certificates into a safer and easily accessible electronic form. The Depository is the body which is responsible for storing and maintaining your shares electronically.
Key Points
The meaning or process of dematerialization is a rather simple one. There are 5 steps for dematerializing your shares:
Did You Know? An ISIN (International Securities Identification Numbering) is a standardized global number format, assigned to uniquely identify any tradable financial asset like stocks, bonds, futures, and options.
Consider all the hassles you have to go through with physical securities. In this digital day and age of going cashless, our reliance on papers has reduced. Different aspects of your life are going paperless: traveling in a cab, paying for utility, paying your phone bills are just a few examples. Then, why not go paperless when it comes to your investments in the share markets?
Now consider a world without the risk associated with holding on to physical share certificates:
What if you don’t dematerialize though? What do you lose out then?
A Local Glimpse:
A Global picture: 1973: First depository in the world: Depository Trust Company (DTC) in the US.
Dematerialisation is an important process - a must for ease of trading in the stock market. If however, you decide to skip it:
Wrapping Up
About Author
Upstox Desk
Upstox Desk
Team of expert writers dedicated to providing insightful and comprehensive coverage on stock markets, economic trends, commodities, business developments, and personal finance. With a passion for delivering valuable information, the team strives to keep readers informed about the latest trends and developments in the financial world.
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