Demat shares for private companies: rule 9B, ISIN and PAS-6

In short: since 30 June 2025, every private company that is not a small company must issue securities only in demat form, and its shareholders must dematerialise their shares before they transfer them or take up new ones (rule 9B of the Companies (Prospectus and Allotment of Securities) Rules, 2014). A small company and a government company are outside the rule.

What rule 9B requires:

• The company issues new securities only in demat form.
• It facilitates demat of all its existing securities, through an ISIN from NSDL and CDSL and an agreement with a registrar and share transfer agent (RTA).
• Before a buy-back, bonus or rights issue, the holdings of its promoters, directors and key managerial personnel must be in demat.
• A shareholder must demat their shares before transferring them or subscribing to more.
• The company files PAS-6, a reconciliation of its share capital, every half year.

How a company gets an ISIN, in order:

• 1. Check whether the company is a small company on its latest audited figures. If it is, rule 9B does not apply yet.
• 2. Appoint an RTA and sign the tripartite agreements with NSDL and CDSL.
• 3. Pay the depositories' joining and annual fees, and apply for the ISIN.
• 4. Shareholders open demat accounts and submit their share certificates for conversion.
• 5. File PAS-6 for each half year from then on.

What it costs: depository joining fees, annual custody fees for each depository, the RTA's fees, and professional fees. Quotes vary between depositories and RTAs, so compare them before signing.

Foreign-owned companies: an Indian subsidiary of a foreign company that is not a small company is covered too, and an allotment to the foreign parent must be credited in demat form as well as reported in FC-GPR.

This note gives general information on the law as on 7 November 2026. It is not advice on any particular matter.