The Securities and Exchange Board of India (Sebi) has expanded the list of scrips for compulsory dematerialised trading from the existing 30 to 50. Compulsory demat in these scrips will be effective from August 10, 1998.
The scrips include some of the Sensex heavyweights and market sensitive stocks like ITC Ltd and SAIL, alongside Bajaj Auto. The market regulator has decided on this move after reviewing the progress so far and the need to provide an impetus to the demat process.
The list of scrips added is as follows: ABB, Asian Paints, Cochin Refineries, Glaxo India, IFCI, Indo Gulf Fertilisers, Indian Rayon, MRPL, Oriental Bank of Commerce, Reliance Capital, Reliance Petroleum, SAIL, Tata Tea, Thermax, TVS Suzuki, Bajaj Auto, ITC, Hero Honda Motors, Madras Refineries, NIIT Ltd.
This decision was taken following a meeting of the Sebi-constituted working group yesterday, comprising of FIIs, custodians, stock exchanges and mutual funds. The group reviewed the progress of dematerialisation since the move first commenced from January 15 onwards. The group has also decided that in the first phase all the scrips in the BSE Sensex and Nifty-50 are covered through compulsory demat.
The scrips were selected on the basis of five parameters - the trading volumes, institutional holding, extent of dematerialisation, incidence of bad deliveries and distribution of registrars. The group in its previous meeting had decided to increase the number of scrips for compulsory demat from 8 to 30 and now to 50.
According to Sebi sources, some of the scrips have been left out as the companies are yet to enter into an agreement with NSDL. Sebi has urged custodians, registrars and share transfer agents and NSDL to target the number of exchanges connected to NSDL to reach at least five and the market capitalisation of demat stock to reach Rs 50,000 crore target by August 15, 1998.
The group also recognised and appreciated the efforts of the custodians and registrars and share transfer agents in speedily processing the large number of requests of institutional investors to dematerialise the stock of physical securities.
