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Difference Between Dematerialization and Rematerialization June 02 2021Dematerialization and Rematerialization

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Difference Between Dematerialization and Rematerialization

Anyone with even a passing interest in the financial markets is familiar with the term demat. Have you ever pondered what it actually means? The term "demat" refers to a dematerialized account, which is derived from the concept of dematerialization. Rematerialization is another commonly used term, which is often used in the context of markets. So, what exactly do the two terms mean, and how do they differ?

What is Dematerialization?

The process of converting physical debentures and share certificates into electronic form is known as dematerialization.

This reduces the risk associated with physically holding shares or debentures. Depositories such as the National Securities Depository Ltd (NSDL) and the Central Depository Services Ltd hold your shares in electronic format (CDSL).

The benefit of dematerialization is that it allows for quick and smooth transactions. Any transaction can be completed on your smart devices, including your smartphone. Any transaction does not require a personal visit to the broker. A dematerialized account also eliminates the dangers associated with physical holding, such as forgery, damages, or theft.

Other securities, such as mutual funds, bonds, and exchange-traded funds, can also be held in a dematerialized format. For the dematerialized holding of your shares, there is a maintenance fee. Any benefits you receive, such as refunds, dividends, or interest, are deposited immediately into your demat account.

What is Rematerialization?

An investor who has already converted his or her shares or securities to electronic form and now wishes to convert them back to physical form can do so through the rematerialization process.

This method is chosen by people who want to avoid demat account maintenance fees. To convert physical certificates into electronic shares or securities, you need to fill out a Remat Request Form (RRF) and contact a Depository Participant (DP).

Let’s evaluate some differences between Dematerialization and Rematerialization

· Rematerialization, is the process by which an investor who has previously converted shares or securities to a digital or electronic format now wishes to convert those shares to a physical one. On the other hand, Dematerialization is the exact opposite of this process. The major distinction between demat and remat shares is that demat shares are paperless, but remat shares need physical holding of shares.

· The investor would need to fill out a remat request form and pay a personal visit to the DP or depository participant in order to get electronically held shares and securities back into a physical format. While dematerialised shares lack a unique number for identification, rematerialised shares do have a unique number.

· All transactions involving shares will take place physically once they have been rematerialized. Physical certificates have no maintenance fees, but the process is time consuming, and there is always the possibility of fraud, damage, or theft when holding share certificates in your hands. The company is responsible for keeping physical shares and not the depository participant.

· Clearly, there are numerous advantages to dematerialization for a shareholder. Because consumers can trade or invest while on the road, the simplified internet method encourages more people to do so. Rematerialization, on the other hand, can be a lengthy and time-consuming process. Rematerialization is an option for investors who want to avoid paying maintenance fees.


An investor can choose between dematerialized and rematerialized methods of owning shares, however demat accounts are becoming more popular simply because they are easier to manage and the average investor has more confidence in transacting in this paperless and smooth manner.

Physical visits and careful storing of share certificates may be required if you go the remat option. It may be a simpler approach to open a trading account and start your journey into the markets if you are a beginner who intends to take up trading.

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Prevent Unauthorized Transactions in your demat and trading account --> Update your Mobile Number/Email id with your Depository Participant and Stock Broker. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat/trading account directly from CDSL and Stock Exchanges on the same day.........issued in the interest of investors...

1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.

2. Update your Mobile Number & Email Id with your Stock Broker/ Depository Participant and receive OTP directly from Depository on your Email Id and/ or Mobile Number to create pledge.

3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

4. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued by NSE vide. Circular No. NSE/INSP/45191 dated: July 31, 2020 and NSE/INSP/45534 and BSE vide Notice No. 20200731-7, dated: July 31, 2020 and 20200831- 45 dated: August 31, 2020 and dated: August 31, 2020 and other guidelines issued from time to time in this regard.

5. Check your Securities/ MF/ Bonds in the Consolidated Account Statement issued by NSDL/ CDSL every month.


  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to ₹ 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost

Dear Investor,
As you are aware, under the rapidly evolving dynamics of financial markets, it is crucial for investors to remain updated and well-informed about various aspects of investing in securities market. In this connection, please find a link to the BSE Investor Protection Fund website where you will find some useful educative material in the form of text and videos, so as to become an informed investor.
We believe that an educated investor is a protected investor !!!

"As per the directives of CDSL and esteemed Exchanges, it has been made mandatory for every client to furnish their latest KYC details viz. Valid Mobile No., Email- Id & Income range on or before 31.05.2021 else your Account will be marked as Non Compliant and will be Freezed till the compliance of such requirement."
"No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorize your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."
"KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary."
Dear Investor if you wish to revoke your un-executed eDis mandate, please mail us with ISIN and quantity on by today EOD."

INDIRA SECURITIES PVT.LTD. (SEBI REG.NO.):NSE TMID: 12866, BSE TMID: 663, CDSL DPID: 17000 SEBI REG. NO.: INZ000188930, MCX TM ID: 56470, NCDEX TM ID: 01277, CDSL REG. NO.: IN-DP-90-2015, CIN : U67120MH1996PTC160201




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