R.L.

INSTITUE OF MANAGEMENT STUDIES

(TVR NAGAR, ARUPPUKOTTAI ROAD)

MADURAI 625 002

Name

: P.GOKULRAJ

Roll No

: 14530

Class

: II MBA

Specialization

: Finance/Marketing

E-Mail

: gokulloyal@gmail.com

Address

: 9-23-8, vinayakar nagar,

Pandalgudi-626113.

Name of the Company

: KARVY STOCK BROKING LTD

Address of the Company

: Karvy House
46, Avenue 4, Street No.1,
Banjara Hills,
Hyderabad - 500 034,
Telangana, India.
.

Title of the project

: DEMATERIALISATION OF SECURITIES

Name of the Department

Where project is undertaken

: ADVISORY

Details about Organization guide

: In - Charge

Name
Phone No

:
:

Mr. Dhamodaran- team leader

040-3321 6078

Name of the Internal Faculty Guide: Dr. K. Navarathinam

INTRODUCTION:
FINANCE:
Finance is the process of conversion of accumulated funds to productive
usage. Finance helps to direct the flow of economic & facilitate in the firm's
smooth operations.
According to HOWARD AND OPTIONS Finance is defined as "the
administration area of set of administrative functions in an organization which
has to do with the management of flow of cash so that the organization will
have the means 2 carry out its objectives as satisfactory as possible and at the
same time meet the obligations as they become due".
FINANCIAL SYSTEMS:
It is a set of markets and institutions to facilitate the exchange of assets and
risks. Indian financial system comprises of three parts viz., FINANCIAL
INSTITUTIONS

or

INTERMEDIARIES,

FINANCIAL

MARKETS,

FINANCIAL INSTRUMENTS. Financial Intermediaries, provide funds by

pooling the funds from investors. They are the commercial banks, mutual funds,
insurance companies, provident funds, factors &non banking financial institutions
etc...Financial instruments, through which the firm can raise funds from
public or institutions. Some of them are equity shares, preferential shares,
bonds, commercial papers, certificate of deposits etc...

FINANCIAL MARKETS:
Financial markets consist of two parts.
1)Capital market
2)Money market

Money market is a market for dealing in monetary assets of short-term

nature for meeting the temporary cash requirements. Capital market is a market
for long-term funds. Capital market has two
segments.
1)Primary market (New Issues Market)
2)Secondary market

The New Issue Market deals in new securities i.e. Securities, which are not
previously offered to the investors. The primary market does not have any
organizational setup and is recognized only by the specialist institutional
services that it renders to the lenders and borrowers of capital funds.
The secondary market deals in old/existing securities, which were granted
in stock exchange listing. Stock exchanges provide liquidity to investments. It has
a physical existence and a geographical area.

OBJECTIVES OF THE PROJECT:

*To know the mechanism in the Demat
*To study the activities in Primary Market and Secondary Market in

the context of Dematerialization

*To study the activities of Depository Participants
*To study the process of Settlement
*To study the process of DEMAT
*To know the advantages of the DEMAT
*To know the services provided by the Depository Participant

SCOPE OF THE STUDY:

The scope of the study is confined to the process of dematerialization of
securities and its advantages.
The scope of the project is limited to the depository participant services
through depositors.

METHODOLOGY OF THE STUDY:

The study is based on both the primary and the secondary sources of data.
The source of primary data is from the unstructured interview of the
officials in the company.
The secondary data is collected from the websites:
*www.nseindia.com
*www.moneycontrol.com

LIMITATIONS OF THE PROJECT:

By

not considering the entire depository participant's implications

elating to the pattern of trading may have been missed in the study.
The

study is confined to only depository participants services through

Depositories

NSDL.

Exhaustive analysis, problems of listing and management of

trade and SEBI guidelines of relating there lot are not covered due to
limited & keep the study in manageable limits

DEMATERIALISATION:
DEFINITION:
Dematerialization is the process by which a BO can get his physical
securities converted into electronic form.
Pre-requisites for dematerialization are:
1.Investor

should have a demat account with any DP of CDSL.

2.Securities

to be dematerialized must have been admitted in CDSL

i.e. ISIN for the securities should be available in CDSL

3.Investor

should be the registered holder for the securities in the

books of the company.

The BO submits a request to the DP in the Dematerialization Request
Form (DRF) along with the certificates. The DP verifies the information on
the DRF and physical certificates and enters the details in the system to
setup a request electronically. The DP sends the physical documents to the
concerned issuer/RTA. If the Issuer/RTA find the DRF and certificates in
order, it registers CDSL as the registered holder of the securities and
confirms the DRN electronically to CDSL. On receiving such confirmation,
CDSL credits the BO account. The process flow, of a demat request is given
below:
If the issuer/RTA rejects all or some of the certificates in a demat request
then the same are sent back to the DP mentioning the rejection reason(s). DP
will then ask the BO to rectify the reason of rejection and send the certificates
again for dematerialization under a fresh demat request.
Dematerialization can be normal dematerialization as explained above or it
can be "Transfer-cum-Dematerialization (TCD)" or "Transposition-cumDematerialization".