How to Convert Physical Shares to Demat in India
Step-by-step guide to converting old physical share certificates to demat, the SEBI direct-credit change from April 2026, and what to do if lost.
Many Indian investors still hold physical share certificates purchased years or even decades ago.
At the time, companies issued paper certificates as evidence of shareholding. These certificates were often stored in files, lockers or cupboards and, over the years, may have remained untouched.
Today, the securities market operates predominantly in electronic form. Listed shares can continue to be held in physical form. However, they generally need to be dematerialized before they can be sold or transferred.
If you still hold old physical share certificates, the first step is to establish their current status and determine whether they can proceed directly for dematerialization or whether any documentation or shareholder-record issues need to be addressed first.
What Is Dematerialization?
Dematerialization is the process through which physical share certificates are converted into electronic securities and credited to the investor’s demat account.
The demat account is maintained through a registered Depository Participant (DP), such as a bank, broker or other authorised participant.
Step-by-Step Process to Convert Physical Shares to Demat
Step 1 – Open or Use an Existing Demat Account
To hold shares electronically, the investor needs a demat account with a registered Depository Participant.
The name and other details in the demat account should correspond with the shareholding records. Differences in the records may need to be addressed before the process can be completed.
Step 2 – Complete the Dematerialization Request
For a straightforward dematerialization request involving existing physical certificates, the investor generally submits a Dematerialization Request Form (DRF) through the Depository Participant.
The request contains details of the investor, demat account and physical securities being submitted.
Step 3 – Submit the Physical Share Certificates
The original physical share certificates are submitted with the dematerialization request through the Depository Participant.
The request is then processed through the depository system and sent for verification by the concerned company / Registrar and Transfer Agent (RTA).
Step 4 – Verification by the Company / RTA
The company or RTA verifies the certificates and shareholder details against its available records.
Depending on the case, issues such as the following may need to be addressed:
- Name mismatch
- Signature mismatch
- Outdated KYC or shareholder records
- Differences in joint-holder details
- Company merger or name change
- Missing or damaged certificates
- Transmission required following the death of a shareholder
If there are no discrepancies, the dematerialization request can proceed for credit of the securities.
Step 5 – Shares Are Credited to the Demat Account
Once the dematerialization request is verified and approved, the corresponding securities are credited electronically to the investor’s demat account.
The physical certificates submitted for dematerialization cease to represent separately transferable securities after successful conversion.
Important SEBI Update – Direct Demat Credit for Certain Investor Service Requests
SEBI introduced an important change effective 2 April 2026 for securities arising from certain investor service requests.
Earlier, in cases such as duplicate securities, transmission, transposition and certain other service requests, the company/RTA could issue a Letter of Confirmation (LOC), which the investor subsequently submitted through the Depository Participant for dematerialization.
Under the revised framework, the requirement for issuance of an LOC has been removed for the covered investor service requests.
After completing the required verification and due diligence, the company/RTA can now initiate the process for direct credit of the securities into the investor’s demat account.
For such service requests, investors are required to have a demat account and provide the prescribed documents, including a Client Master List (CML) not older than two months and duly attested by the Depository Participant, along with the applicable request documents.
SEBI’s revised framework provides for the RTA / listed company to process the service request and issue the securities directly in dematerialized form within the prescribed timeline after receipt of the request and resolution of any objections.
This change is particularly relevant where demat follows processes such as:
- Duplicate / lost share certificate requests
- Transmission
- Transposition
- Certain claims from unclaimed suspense accounts
- Other covered investor service requests
What About an LOC Issued Before 2 April 2026?
SEBI has provided a transition mechanism for LOCs issued before the revised framework came into effect.
An LOC issued before 2 April 2026 can continue to be submitted to the Depository Participant for dematerialization within the applicable validity period — 120 days from the date of issuance of the LOC.
How Long Does Dematerialization Take?
The time required depends on the nature of the holding and whether the shareholder and certificate details correspond with the records maintained by the company/RTA.
A straightforward dematerialization request may be completed faster than a case involving:
- Name or signature discrepancies
- Missing certificates
- Outdated shareholder records
- Transmission
- Company mergers or name changes
- Other documentation deficiencies
For investor service requests covered by SEBI’s revised framework effective 2 April 2026, the company/RTA is required to process the request and directly issue the securities in dematerialized form within 30 days of receipt of the request after removal of objections, if any, in accordance with the applicable framework.
Common Issues During Dematerialization
Older physical shareholdings often involve issues that need to be resolved before the shares can be credited in demat form.
Common situations include:
- Name or signature mismatch
- Lost or damaged share certificates
- Old or incomplete KYC records
- Differences in joint-holder details
- Company merger or change of name
- Transmission required after the death of the registered shareholder
The appropriate process depends on the nature of the issue.
If the Registered Shareholder Has Passed Away
If the physical shares continue to stand in the name of a deceased shareholder, transmission may need to be completed before the securities can be credited to the eligible claimant.
The documentation and process depend on factors such as the holding pattern, nomination and legal-heir position.
Related Guide: Transmission of Shares After Death of a Shareholder →
What If the Original Share Certificates Are Lost?
If the original physical certificates are unavailable, a separate investor service request may first be required.
Under SEBI’s revised framework effective 2 April 2026, securities arising from covered service requests such as duplicate securities are issued directly in dematerialized form after the required verification and processing.
This means that the older LOC-based process should not be described as the current procedure for new requests after 2 April 2026.
Related Guide: What to Do If Physical Share Certificates Are Lost →
Special Window for Certain Old Physical Share Transfers
A separate SEBI special window is currently available for certain physical securities that were sold or purchased before 1 April 2019 but whose transfer was not completed.
The window is open from 5 February 2026 to 4 February 2027, subject to the conditions prescribed by SEBI.
This is a separate process from ordinary dematerialization and applies only to eligible old transfer cases.
Related Guide: SEBI Special Window 2026–27 – How to Complete Old Physical Share Transfer (SH-4) Cases →
Quick Self-Check: Do You Still Hold Physical Shares?
Consider reviewing the holding if:
- You have old paper share certificates
- The shares have not yet been credited to a demat account
- The company has merged or changed its name
- The shares remain in the name of a deceased parent or family member
- You are unsure whether the shares are still with the company, have moved to IEPF or require another process
The first step is to establish the present status of the holding. This helps determine whether the case requires straightforward dematerialization or another process such as record correction, transmission, duplicate securities or IEPF recovery.
Need Help With Old Physical Shares?
If you hold old physical share certificates and are unsure about their current status, a preliminary review can help determine whether dematerialization can proceed directly or whether another process needs to be completed first.
Related Guides
Sources & References
- SEBI Circular dated 30 January 2026 – Ease of Doing Investment and Ease of Doing Business – Doing away with requirement of issuance of Letter of Confirmation (LOC) and to effect direct credit of securities in dematerialisation account of the investor
- SEBI Circular dated 30 January 2026 – Special Window for Transfer and Dematerialisation of Physical Securities
- SEBI Master Circular for Registrars to an Issue and Share Transfer Agents (RTAs) – as amended from time to time
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