Small Investors Interested In Depository: Bhave Sourav Majumdar &

Small investors, who will ultimately determine the extent of success of the Indian depository system, have begun showing interest in dematerialised trading.

The National Securities Depository is regularly receiving requests for dematerialisation of shares in small lots of 100 or 200.

The requests for demateralisation of small lots of shares indicate that retail investors are interested in checking out the depository system. Obviously, smaller lots do not indicate dematerialisation orders from institutional investors, C B Bhave, managing director, NSDL, said.

This is a major step forward as volumes of dematerialised shares in total as well as in each company have not yet taken off.

Bhave said the success story of the NSE was based on the retail investor and it will be the retail investor who will make depository trading a success.

Meanwhile, outstation brokers are joining the depositories as participants and broking outfits from Delhi and Coimbatore have already enlisted. Fifty more brokers have applied from all over India.

Bhave cited the advantage of depositories and emphasised that the settlement system will undergo a major change with T+3 settlement becoming a reality in NSDL within another nine to fifteen months.

A paperless environment will increase investment flow not only from ordinary investors who are scared to transact in the secondary market but also from FIIs who in their demand for clean scrips had almost divided the market into twoone sector which had institution to institution trading, and the other of retail investors.

That retail investors are interested in the depository is evident from the fact that the Bank of Baroda issue threw up a figure of 20,000 out of a total 2 lakh investors who indicated their preference for dematerialised shares.