What is Dematerialization and Rematerialization of securities?

Dematerialization of securities:

Dematerialization is the process of altering securities held in physical form into holdings in book entry (electronic) form.

In demat form, one investor's shares are not well-known from another investor’s shares and these shares do not have any unique number, folio number or certificate number.

SEBI’s policy require a company making a public issue of shares to enter into an agreement with all the depositories to dematerialize its shares so that investors can be given the choice of holding the shares in dematerialized form.

Rematerialisation of securities:

Rematerialization is overturn of dematerialization and is the process of changing securities held in electronic form into physical form.

Upon request of investors, Securities on rematerialization are fixed in physical form with unique numbers, in place of the securities held electronically in book-entry form with a depository.