Background:
Re-lodgement of Shares refers to the process of re-submitting physical share transfer requests that were previously lodged before but were rejected, returned, or left unprocessed due to documentation errors or procedural lapses.
SEBI discontinued the transfer of shares in physical form starting April 1, 2019[i]. Investors who had submitted physical share transfer requests before this cutoff date but faced rejection due to errors or documentation issues were allowed to re-lodge their requests. However, the deadline for this relodgement was set as March 31, 2021[ii] and many investors were unable to complete the process within that timeframe.
However, SEBI later received numerous representations from investors, RTAs, and listed companies indicating that many investors had missed the March 31, 2021, deadline due to unawareness or procedural hurdles. To address these concerns, SEBI convened a Panel of Experts comprising RTAs, representatives from listed companies, and a legal expert. After evaluating the issue, the panel recommended that one final opportunity should be provided to such investors.
Introduction:
Acting on this, SEBI through circular issued on July 02,2025 has created a special window of six months from July 7, 2025, to January 6, 2026 to help investors re-lodge physical share transfer requests that were originally submitted before April 1, 2019 but got rejected, returned, or left unprocessed due to documentation or procedural issues. In this article we shall understand the compliance angle of this circular.
Hence provisions of this circular would apply to transfer deeds lodged before April 1, 2019, that were rejected or not acted upon. Limited publicity and investor awareness of both the 2021 and 2025 special windows, causing many to miss deadlines or submit incomplete follow-ups.
Anomalies:
- Whether share transfer requests relodged would be transferred in physical or demat form?: All share transfer requests that would be re-lodged pursuant to SEBI circular dt: July 2, 2025, would be transferred in physical form but issued in dematerialized form. No physical certificates will be issued. As both Ministry of Corporate Affairs (‘MCA’) and Securities and Exchange and Board of India (‘SEBI’) has made it mandatory for issue and transfer of securities in demat, physical share applications relodged would be transferred in physical form but issued it in demat form[iii]. SEBI is facilitating re-lodgement of physical shares that were stuck due to ban on physical transfer w.e.f. April 1, 2019.
- Whether physical share transfer requests would lead to non-compliance with provisions of companies act?
Rule 9B of the Companies (Prospectus and Allotment of Securities) Rules, 2014 mandates the dematerialisation of securities for unlisted public companies. According to this rule, issue the securities shall be only in dematerialised form and facilitate dematerialisation of all its existing securities form w.e.f. October 2, 2018. As this rule is applicable to unlisted public companies the listed companies are out of the purview of this rule.
- Does SEBI LODR allow transfer of securities in physical form?:
Regulation 40(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 reads:
“Save as otherwise specified in provisions of securities laws or Companies Act, 2013 and rules made thereunder, the listed entity shall also comply with the requirements as specified in this regulation for effecting transfer of securities.
Provided that requests for effecting transfer of securities shall not be processed unless the securities are held in the dematerialized form with a depository:
Provided further that transmission or transposition of securities held in physical or dematerialised form shall be effected only in dematerialised form.
As specified in regulation 40, share transfer requests will be processed once the securities are held in demat form. As per July 2, 2025 circular, physical share once lodged for the purpose of transfer would be transferred to the transferee but shares would be issued to the transferee in demat form[1]. No physical certificates will be reissued, so this regulation does not prohibit Re-lodgement of Transfer Requests of Physical Shares in this special window.
- Stamp Duty Implications: The payment of stamp duty is applicable on the transfer deed entered by the parties in the format given under SH-4. In those cases where, the payment of the stamp duty has already been done for SH-4 when parties entered into an agreement then no further payment of stamp duty shall be done for shares being re-lodged for the transfer during this special window.
Because Stamp duty is payable at the time of execution of the transfer deed (SH-4), not during re-lodgement. Once paid and properly affixed on the SH-4 form, no additional stamp duty is required for re-lodgement, provided the original deed remains unchanged.
Companies Act, 1956 used to have provision regarding the lodgement or re-lodgement of instrument of transfer of shares and payment of additional stamp duty under section 108 if such deeds were being lodged by the parties beyond the time limit of 4 months.
Those particular provisions were removed from the current act i.e. Companies Act, 2013, and introduction of Form SH-4 was done for transfer of shares. These statutory changes indicate towards non-applicability of concept of lodgement or re-lodgement and payment of additional stamp duty on the instrument of transfer of shares.
- Non-claiming of shares post issue in demat: It may happen that post transfer and issue of shares in demat form to the transferee, it remains unclaimed. In such scenarios, SEBI circular July 2, 2025, does not provide any clarity. Investors in these scenarios may be guided by guidance given by SEBI to RAIN on December 30, 2022[iv]. In this guidance SEBI had stated that in case the on the issue of letter of acceptance post execution of corporate action pursuant to SEBI circular January 25, 2022, it is not enchased by the shareholder then such shares may be transferred to suspense escrow account.
Steps to be taken:
A step-by-step procedure to be followed to complete the relodgement of physical share transfer requests under SEBI’s special window (valid from July 7, 2025, to January 6, 2026):
- Verify Eligibility – Ensure the transfer deed was originally lodged before April 1, 2019 and confirm it was rejected, returned, or left unprocessed due to documentation issues.
- Gather Required Documents: includes Original physical share certificate, Corrected transfer deed (Form 7B), PAN card and address proof of transferee, Client Master List (CML) from your demat account, Any communication from the company/RTA regarding earlier rejection (if available).
- Complete the Transfer Deed – Ensure signatures of both transferor and transferee match records and Pay stamp duty if it wasn’t paid originally
- Open a Demat Account (if not already done) – For this choose a SEBI-registered Depository Participant (DP) like NSDL or CDSL, also Complete KYC and get your Client Master List
- Submit to Registrar & Share Transfer Agent (RTA) – Send all documents to the company’s RTA before January 6, 2026, along with the cover letter in accordance with the relevant circular stating your request for relodgement under the special window.
- Public Awareness:
Listed companies are required to comply with the Securities and Exchange Board of India (SEBI) guidelines regarding public dissemination of investor-related information. This includes publicity through both print and social media platforms. Notices must be published in widely circulated newspapers in English and regional languages on a bi-monthly basis during any special window period, such as for re-lodgement of physical share transfers. Additionally, companies are expected to utilize their official social media accounts like Facebook, Instagram, LinkedIn, or X (formerly Twitter) to share investor communications in a clear and accessible manner.
SEBI has stated that, “Listed companies, RTAs and Stock Exchanges shall publicize the opening of this special window through various media including print and social media”. Here provision is an inclusive provision. It means any media including print and social media would be applicable which will make investors aware about the opening of special window for re-lodgement of share transfer requests. Hence a company may publish the notice of opening of special window on stock exchange portals (e.g., BSE or NSE) or prominently display on the homepage or investor relations section of the listed companies. But it is recommended to publish this notice in print and social media. To remain fully compliant, companies should ensure their website is up to date, especially the investor relations section, and coordinate with their Registrar & Share Transfer Agent (RTA) to maintain consistency across platforms. In cases where social media is not used, companies are encouraged to document their publicity activities carefully for internal audits and future references.
Conclusion:
SEBI’s July 2, 2025, circular marks a thoughtful and investor-centric move to resolve long-standing issues surrounding physical share transfers. By reopening a six-month special window for re-lodgement of transfer deeds lodged before April 1, 2019, SEBI has balanced regulatory rigor with practical compassion. For investors holding rejected or unprocessed physical share transfer deeds, this may be the last opportunity to regularize ownership. Timely action, complete documentation, and coordination with RTAs or listed companies will be key.
This article is published on Taxmann. The link for the same
Mr. Vallabh Joshi- Senior Manager-vallabhjoshi@mmjc.in
Mr. Shreyas Lele-Trainee -shreyaslele@mmjc.in
[i] https://www.sebi.gov.in/media/press-releases/dec-2018/transfer-of-securities-only-in-demat-form-deadline-extended-till-april-1-2019_41214.html
[ii] https://www.sebi.gov.in/legal/circulars/sep-2020/re-lodgement-of-transfer-requests-of-shares_47500.html
[iii] Inserted w.e.f. 2-10-2018 by the Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2018, vide GSR 853(E), dated 10-092018.
[iv] https://taxguru.in/sebi/sebi-guidelines-procedural-aspects-suspense-escrow-demat-account.html#:~:text=Suspense%20Escrow%20Demat%20Account%20shall,Suspense%20Escrow%20Demat%20Account%20to