Still holding paper shares? Why claiming is difficult and how to convert to demat

Many investors and their families across India still hold old physical share certificates issued decades ago, which are often discovered while sorting through inherited documents, family lockers or forgotten investment files. Frequent posts on social media show people finding paper shares that had remained untouched for years, with some even seeking advice on what to do with them.

If you come across such certificates, it is important to know that converting them into demat holdings may be tricky. Decades-old records, missing documents and other succession-related issues can make the process lengthy and complicated, especially when the original shareholder is no longer alive.

To help investors resolve such legacy issues, the Securities and Exchange Board of India (SEBI) has introduced a series of measures. The latest effort includes a special window for eligible physical shareholdings and a simplified framework for the transmission of securities.

SEBI extends relief for investors

SEBI’s January 2026 circular provides a special window to help shareholders transfer and convert old physical share certificates into demat form. The facility applies to shares bought or sold before 1 April 2019, and is intended to help investors obtain rightful access to their holdings.

It is restricted to bona fide and uncontested cases and does not cover disputed matters or shares that are already transferred to the Investor Education and Protection Fund, the circular read.

The special window opened on 5 February and will remain open till 4 February 2027, for eligible legacy physical shareholding cases. The framework also includes safeguards such as compulsory dematerialization (demat), a one-year lock-in, indemnities and public notices.

SEBI eases transmission rules for shareholders

SEBI has separately approved norms for a simplified, standardized framework for the transmission of securities, aimed at making the process easier for legal heirs and nominees.

The new framework provides for faster processing of small-value claims, raises the threshold for simplified documentation and reduces procedural requirements. In certain cases, it also allows the relaxation of probate requirements, which could help families claim shares and other securities more quickly after the original holder's death.

Though paper stocks are still considered valid, you need to convert them into electronic format to execute any market transactions. Demat accounts are essential for anyone wishing to trade in the Indian stock market. These accounts are offered by depository agencies, primarily CDSL and NSDL, both of which are registered with the market regulator.

Investor can convert paper shares into demat holdings

The transferee shall be mandatorily required to submit the following documents to convert their paper shares into demat holdings:

• Original security certificates
• Transfer deed executed prior to 1 April 2019
• Proof of purchase by transferee, as may be available
• KYC documents of the transferee
• Latest client master list, not older than two months, of the demat account of the transferee, duly attested by the depository participant
• Undertaking cum Indemnity bond as per the prescribed format

Once you have these documents, contact your depositary participant (DP) and submit a request to convert your physical share certificates into digital form, which will then be credited to your demat account.

You must specifically request a dematerialization request form and open a demat account beforehand.