Dematerialization and Rematerialization in Stock Investment

Dematerialization is the conversion of a share certificate from physical to electronic form for the same holding number that was credited to your dematerialization account that you opened through a participant depositary. Dematerialization is a process by which the company recovers the physical share certificates of an investor and an equivalent amount of securities is credited electronically to the depositary. The depositary is an organization in which the securities of a shareholder are kept in electronic format.

Materialization is a process by which a shareholder can convert their participation into a physical form of share certificate. Investor Benefits of Dematerialization – A Safe and Convenient Way to Hold Values. The deposit system reduces the risks related to the possession of physical certificates, for example, loss, theft, mutilation, falsification, etc. It ensures the settlement of transfers and reduces the delay in the registration of shares. Ensures faster communication with investors. Ensures faster payment on share sales. Provides more acceptability and liquidity of securities.

Market correction is a process by which stockbrokers attempt to correct the value of overvalued stocks. The stock market responds to both fundamental news and rumors. These two factors can drive the stock price to an overvalued level or to a below-price state. When the market is very overvalued, there will be problems, especially for those who have borrowed money to buy stocks. Overvalued stocks are stocks that have peaked over a period of time; they enter a resting phase or in most cases begin to decline.

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