In a fascinating thread on X, user Rattan Dhillon (@ShivrattanDhil1) recently shared images of two physical share certificates from Reliance Industries Limited, dated 1992 and 1988.
We found these at home, but I have no idea about the stock market. Can someone with expertise guide us on whether we still own these shares?😅@reliancegroup pic.twitter.com/KO8EKpbjD3
— Rattan Dhillon (@ShivrattanDhil1) March 11, 2025
This sparked widespread interest among stock market enthusiasts. Posted on March 11, 2025, Dhillon expressed confusion about whether these certificates still hold value, given his lack of knowledge about the stock market.
The certificates, representing ownership of equity shares, have potentially grown significantly due to Reliance’s historic stock splits and bonus issues.
Estimates suggest their current value could be around Rs 11.88 lakhs for 960 shares after accounting for corporate actions.
This discovery highlights the enduring value of legacy investments and the impact of stock market mechanisms like splits and bonuses. It also raises discussions on how shareholders can claim or convert such assets into modern demat accounts.
Table of Contents
Reliance’s Past Stock Splits and Stock Bonuses
Reliance Industries Limited, founded in 1973 by Dhirubhai Ambani, has become one of India’s largest conglomerates. Over the decades, the company has used stock splits and bonus issues to make shares more accessible to retail investors, enhance liquidity, and reward shareholders.
Stock Splits:
Reliance has undergone multiple stock splits, reducing the share price and increasing the number of outstanding shares. Key stock splits include:
- 1997: A 2:1 stock split, doubling the number of shares.
- 2000: Another 2:1 split.
- 2009: A 3:1 split.
These splits effectively multiplied the original share count by a factor of 12 (2 × 2 × 3).
Bonus Issues:
Reliance has also issued bonus shares, distributing additional shares to existing shareholders free of cost:
- 1997: A 1:1 bonus issue.
- 2009: Another 1:1 bonus issue.
These bonus issues further doubled the share count twice, multiplying the original ten shares by 4 (2 × 2). Combined with the splits, the effect results in 960 shares today.
How Stock Bonuses and Stock Splits Affect Stock Numbers and Value
Stock Splits:
A stock split increases the number of shares while proportionally reducing the price per share. Example:
- You own 100 shares of a company, each priced at Rs 1,000 (Total Value: Rs 1,00,000).
- A 2:1 stock split doubles your shares to 200, but the price per share reduces to Rs 500.
- The total investment value remains the same (Rs 1,00,000).
For Dhillon’s case, three stock splits (2:1, 2:1, 3:1) multiplied the number of shares by 12.
Bonus Issues:
A bonus issue increases the number of shares without changing the total investment value. Example:
- You own 100 shares of a company, each worth Rs 1,000 (Total Value: Rs 1,00,000).
- A 1:1 bonus issue gives you 100 extra shares (Total: 200 shares), but the price per share drops to Rs 500.
- The total investment value remains the same (Rs 1,00,000).
In Dhillon’s case, two 1:1 bonuses (1997 and 2009) further multiplied the shares by 4, leading to an estimated total of 960 shares today.
Impact on Stock Value:
Stock splits and bonuses don’t change the immediate market value of an investment. However, they enhance liquidity and attract more investors. Reliance’s stock actions have historically supported its growth, contributing to its current market capitalization of over Rs 16 lakh crore.
For Dhillon, the estimated Rs 11.88 lakh value is derived from today’s market price (around Rs 1,238 per share as of March 2025) multiplied by 960 shares, adjusted for splits and bonuses.
However, converting these physical shares to a demat account requires following specific legal steps.
Transition from Physical Shares to Dematerialized Shares
The discovery of Dhillon’s physical share certificates highlights India’s transition from physical share certificates to dematerialized (demat) accounts. Previously, shares were issued as paper certificates, posing risks of loss, damage, and forgery. To modernize the process, SEBI mandated dematerialization, where shares are held electronically in demat accounts managed by NSDL and CDSL.
By 2019, physical trading was discontinued on Indian stock exchanges, making dematerialization essential for investors like Dhillon to unlock the value of their legacy holdings.
How to Convert Old Physical Shares to Dematerialized Shares
For investors holding old physical shares, converting them to a demat account requires the following steps:
- Open a Demat Account: If you don’t already have one, open a demat account with a depository participant (DP) like Zerodha, IIFL, or a bank offering brokerage services.
- Gather Required Documents: Collect the physical share certificates, a completed Dematerialization Request Form (DRF), and identity/address proof. If the shares belong to a deceased person, provide legal heirship documents.
- Verify Name and Holder Details: Ensure the name on the certificate matches your demat account. If there’s a mismatch, submit a notarized affidavit or gazette notification.
- Submit Documents to DP: Fill out the DRF, attach the certificates, and submit them to your DP. The DP will forward the request to the company’s Registrar and Transfer Agent (RTA), such as Reliance’s registrar.
- Verification and Processing: The RTA verifies the certificates, which may take up to 25 days, and credits the shares to your demat account electronically. Dematerialization charges apply, typically including:
- ₹150 per certificate
- ₹100 courier charge
- 18% GST
- Track the Process: Monitor your demat account for updates. Once processed, the shares appear electronically, allowing trading on stock exchanges.
For Dhillon, this process is crucial, especially if the shares belong to a deceased relative. He must provide proof of inheritance and follow Reliance’s specific guidelines.
Conclusion
This discovery highlights the potential wealth hidden in old share certificates and the importance of understanding stock market mechanisms. It also emphasizes the need to modernize holdings through dematerialization, ensuring legacy investments are not lost but remain accessible in India’s evolving financial landscape.
Disclaimer:
The information provided in this article is for educational and informational purposes only and should not be considered financial, investment, or legal advice. While efforts have been made to ensure accuracy, we do not guarantee the completeness or reliability of the information. Readers are advised to conduct their own research and consult with a qualified financial advisor or legal expert before making any investment or financial decisions. The article may include references to third-party sources, but we do not endorse or take responsibility for their content. Investing in the stock market carries risks, and past performance does not guarantee future results.