Demat Securities become necessary for large unlisted Pvt.

Large unlisted private firms, including unicorns, must now only issue securities in dematerialized forms, according to a mandate from the Ministry of Corporate Affairs (MCA). The MCA has given them until the end of September 2024 to comply with the requirement.

According to an MCA notification, listed firms that issued share warrants prior to the Companies Act, 2013 must notify the Registrar of Companies about the specifics of these warrants within three months of October 28. The bearers of these warrants must turn them in to the company and request that the shares be dematerialized in their accounts within six months.

The bearer of a share warrant often has the option to purchase business stock at a predetermined price on a designated date.

Experts believe that requiring large private companies that are not listed to preserve electronic records of their securities will increase market transparency and make companies more cautious about disclosing their share structures.