What is Rematerialization? How to Convert Electronic Shares to Physical
Rematerialization, or remat, is the process of converting electronic shares held in your demat account back into physical paper share certificates. It is the reverse of dematerialisation. While extremely rare today, the process exists for investors who want physical certificates for specific reasons.
Almost no one uses this process anymore. The Indian stock market has moved entirely to electronic trading and settlement. Physical share certificates cannot be traded on the exchange. If you rematerialise shares, you lose the ability to sell them easily. The shares would need to be dematerialised again before they can be traded.
Why Would Anyone Rematerialise Shares?
In practice, almost nobody does. The process exists as a legal right for shareholders. Some niche situations include personal preference for physical certificates as keepsakes, specific legal requirements in certain estate or trust matters, or as part of old company reorganisations where physical certificates were required.
How Does the Rematerialization Process Work?
You submit a Remat Request Form (RRF) to your depository participant. The DP forwards it to the company's Registrar and Transfer Agent (RTA). The RTA processes the request, issues physical share certificates, and sends them to you by post. The shares are debited from your demat account once the physical certificates are issued. The process can take 15 to 30 days.
Investments in securities market are subject to market risks. This article is for educational purposes only.
Frequently Asked Questions
Can I sell physical share certificates on the stock exchange?
No. Physical share certificates cannot be traded on NSE or BSE. To sell them, you must first dematerialise them back into your demat account. Only electronic shares in demat form can be traded on Indian exchanges.
Are there charges for rematerialization?
Yes. Your DP and the company's RTA may charge processing fees for rematerialization. The charges vary by DP and are typically nominal. However, given that there is almost no practical benefit to rematerialisation, the cost is rarely worth incurring.
How long does rematerialization take?
The process typically takes 15 to 30 days from the date of submitting the RRF to receiving physical certificates. This is significantly slower than dematerialisation, which usually completes in 3 to 7 days.
Can I rematerialise shares of any company?
In principle, yes. Any listed company's shares that are in demat form can be rematerialised. The company's RTA handles the physical certificate issuance. However, for practical purposes, there is no benefit to doing so.
Has SEBI ever considered banning physical share certificates entirely?
SEBI has progressively made electronic holding the default and required standard for all market transactions. While physical certificates have not been explicitly banned for holding purposes, they cannot be used for trading, transfers, or most corporate actions. The effective push is toward 100% demat.
Investments in securities market are subject to market risks. This article is for educational purposes only and does not constitute investment advice.
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