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The Digital Transformation of Traditional Businesses: How Your Company Can Stay Relevant

November 30, 2022

Digital transformation is a term that has been thrown around for years. It’s a buzzword that many businesses have adopted as an important strategy, but until recently there hasn’t been widespread adoption of digital transformation strategies among companies. In the past few years, we’ve seen more businesses implement digital transformation strategies than ever before, in response to changing customer preferences and technological innovations like neobanking.

There are a plethora of real-world use cases for digital transformation, which is great for organisations who are still trying to figure out how to do it themselves. The following article outlines some of the most effective ways that you can digitally transform your business so that it remains relevant in today’s marketplace.

Change Your Culture

Digital transformation begins with a change in organisational culture. In order for your company to compete in the digital space, you must have a culture that is predisposed to digital transformation. If you don’t have the right culture in place, your ability to compete in the online space will be severely limited.

Companies that have successfully digitally transformed have made a concerted effort to change their organisational culture, which has allowed them to make the necessary organisational adjustments to compete in the digital space successfully. In order to change your culture and open the door to digital transformation, you must be willing to change your hiring practices, your employee training methods, and the way that you reward employees.

You must also be willing to make changes to your company’s mission statement, organisational structure and core values to suit the modern world’s requirements. When it comes to organisational culture, change is the only constant. The only way to minimise the impact of disruptive change is to be the catalyst for change.

Digitally-Driven Product Innovation

Successful digital transformation hinges on innovation. If you want your company to remain relevant in today’s digital space, you must be willing to invest the necessary resources in product innovation. If you currently rely on traditional product development practices, you risk falling behind on the digital curve and losing key market share to more innovative competitors.

Product innovation is a continuous process that evolves as technology and consumer preferences do. The moment you stop investing in product innovation, you’ll start to fall behind your competitors, and you’ll most likely never catch up. For example, traditional offerings like RTA services are being digitally revolutionised.

You may have innovative ideas for new products or services, but if you don’t have the resources to bring them to market, then they’re not going to do your business much good. To successfully digitally transform your product innovation practices, you must commit to bringing innovation from idea to implementation as quickly as possible.

Create a Unique Customer Experience

Customers expect your business to provide a consistent and seamless customer experience from the moment they first become aware of your company until the moment they make a purchase and beyond. In the past, customers could expect consistency across all channels, but in today’s digital world, customers expect consistency across all channels, devices and applications, especially when it comes to specialised services like the global fund investment and solutions.

Your primary goal as a digital transformation leader should be to create a unique customer experience that is tailored to the specific needs of your customers. You must bring together your various channels and digital assets so that they flow seamlessly and customers get the experience that they expect.

Establish Confidence in Your Digital Platforms

If your company is not currently leveraging digital platforms, then you’re probably not providing a consistent customer experience across all channels.

Now is the time to establish confidence in your digital platforms so that every customer receives that consistent experience. In addition to providing consistent customer experiences, digital platforms provide a variety of benefits for companies, including cost savings, access to new markets, and enhanced employee productivity.

As a digital transformation leader, you must work to establish confidence in your digital platforms by leveraging a single sign-on solution that allows customers to authenticate one time across all of your digital channels.

Consolidate and Streamline Core Processes

Digital transformation involves more than just leveraging new technologies and digital platforms; it also involves streamlining core business processes so that they can be completed quickly, accurately and efficiently. There are a number of ways that you can streamline your core business processes, including standardising and automating recurring tasks, leveraging AI-driven technologies and adopting a digital-first mentality.

When adopting a digital-first mentality, you must be willing to abandon processes that are too time-consuming or inefficient when there are more efficient solutions available. It can be challenging to abandon long-standing processes, especially when they’re handled manually. One way to get buy-ins from your employees for streamlining and consolidating core processes is to focus on the benefits that employees will see when the process changes.

Hold a Digital Audit for Bottom-Up Feedback

If you want to implement an effective digital transformation strategy, then you must first understand how your customers currently experience your company. A digital audit will provide you with insights into your customers’ needs, expectations and pain points.

You can conduct a digital audit in a variety of ways and the best way to do so is to ask your customers directly. You can hold a digital audit through an online survey, or you can integrate a digital feedback tool into your company’s various platforms. Conducting a digital audit will help you to identify areas in your company that need to be improved so that your customers’ digital experience is consistent and personalised.

Conclusion

When it comes to digital transformation, the one result you can be sure of is change. To successfully implement a digital transformation strategy, you must be willing to change your company’s culture, adopt product innovation practices, have a 360° digitally aware customer experience, digitize core business processes, and build a digital-first organisational structure.

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What Makes KFintech’s Corporate Registry Services Unique

5 KFintech Platforms Driving Digital Transformation In Corporate India

The Impact of Technology on Business Process Outsourcing

What Makes KFintech’s Corporate Registry Services Unique

September 28, 2022

KFintech has partnered in over 1700+ IPOs to help them grow in India. Our superior investor and intermediary servicing, software, and solutions, in addition to our superior client service, help drive faster breakthroughs in the industry. Apart from our IPO solutions, we also enable corporate India to operate and govern better, and stay abreast with various regulatory requirements through our wide range of software solutions.

We are IPO Specialists

Our IPO allocation solution provides the infrastructure needed for the development and implementation of all subscription types, as well as personnel management and other infrastructure. We partner and assist them in meeting the necessary infrastructure, personnel management, and regulatory requirements.

We offer the unique infrastructure set up, personnel management, and stabilisation services for all phases of subscription development and operation.

Stellar Issuer Services

The goal of KFintech is to become the most popular and proactive solutions provider, which provides a technology-enabled investor service platform for clients. By leveraging our expertise, our clients are able to raise customer satisfaction scores to the highest levels. These solutions not just raise the experience of our clients but serve as the benchmarking standards for other participants in India.

Our clients benefit from our investor service platform, which offers the most up-to-date technology.

Investor servicing through New Issues and Bonds, Registry and Transfer has been our core strength for the last 30 years, adhering to corporate governance and best practices, in addition to our technology capabilities. Through our e-platforms, investors can get instant information and other unique features, like a virtual registry, an instant MIS, high transparency, and 100% operational efficiency. As part of our efforts to quicken our investors’ business processes, we are the first Registrar and Transfer Agency in the country to introduce E-Voting, an electronic voting alternative to the paper-based postal ballot process, which allows shareholders to vote digitally.

Industry-Leading Software Solutions

Our firm’s platforms KARISMA, KPRISM, FINTRACK, eAGM, and many others, cut down operating costs without sacrificing performance, investor satisfaction, and client value. Our clients can purchase a wide range of services on our ‘As a Service’ or ‘Build & Operate’ models to suit their needs. KFintech provides all the infrastructure services, including fund accounting and administration, investor servicing (Transfer Agency), digital technology (mobility, analytics, social & cloud infrastructure), CRM solutions, compliance, and physical infrastructure (branches), among other services, in order to ensure that investment management is a top priority.

To know more about us, visit our website or drop us a line here.

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The Digital Transformation of Traditional Businesses: How Your Company Can Stay Relevant

5 KFintech Platforms Driving Digital Transformation In Corporate India

The Impact of Technology on Business Process Outsourcing

The Ultimate Guide to IPO Investments

August 26, 2022

The Initial Public Offering, or IPO, of a company is a once-in-a-lifetime opportunity for investors to invest in the business and potentially make a profit. The surge of interest in IPOs recently has made them an attractive, albeit somewhat risky, investment opportunity. You may also be interested in how to invest in an Initial Public Offering if you want to buy stock directly from the company rather than through a broker. This guide will look at what IPOs are and why they are so lucrative as well as explain how to evaluate IPOs to determine if investing in one makes sense for you.

What is an IPO?

An Initial Public Offering is a process by which a private company first offers shares of its stock to the public so that the company can raise money to start operations or expand. A company may go public by issuing shares that it then sells to institutional investors or the general public, or it may remain private by not issuing any shares. When a company’s shares are traded publicly, it has “listed” those shares on a stock exchange, such as the Bombay Stock Exchange or the National Stock Exchange, and it is “publicly traded”. When you buy shares in an IPO, you can expect to make money on them in two ways:

– Increasing their value as the company grows and the stock price rises.

– From selling your shares when the company goes public and becomes listed on a stock exchange.

Evaluating an IPO

The most important thing to do when evaluating an IPO before deciding to invest in it, is to make sure you understand the business model behind it. This will allow you to see if the business has a strong competitive position and know what is needed to achieve success. There are a few metrics you should look at when assessing the business model:

– The Product: What the company makes, who it sells to, and why customers buy it?

– The Market: Who the company competes with and which company is better?

– The Competition: How the company’s products compare to its competitors’ offerings?

– The Brand: Who the company is and what reputation it has in the marketplace?

– The Management: Who is running the company and how experienced are they?

How to choose which IPOs you’ll invest in

You can easily find a list of upcoming IPOs online, and once you’ve chosen a few to research, the next step is to decide which ones to invest in. There are a few things you should look for when deciding which Initial Public Offerings to invest in:

– Liquidity: How easy it will be to sell your shares if you need to.

– Size: How large an ownership stake you get to buy with your money.

– Growth potential: How the company plans to grow and how much that will increase the value of your shares.

– Risk: How risky the company is and what factors could reduce the value of your shares.

– Expenses: How much it will cost to buy shares in the IPO and how much you’ll pay in taxes.

Takeaways

When choosing which IPOs to invest in, first make sure you understand the business model behind each and then look for ones that have strong growth potential, low risk, and a low expense ratio so that your investment will be profitable. If you’re thinking of investing in an IPO, you have to do your research on the company before buying shares. You can expect to make money on them in two ways: by increasing their value as the company grows and the stock price rises, and by getting a “liquidity event” from selling your shares when the company goes public and becomes listed on a stock exchange. Finally, remember that IPOs are high-risk investments and you should only invest in them if you’re willing to take on the extra risk.

Featured Posts

The Digital Transformation of Traditional Businesses: How Your Company Can Stay Relevant

What Makes KFintech’s Corporate Registry Services Unique

5 KFintech Platforms Driving Digital Transformation In Corporate India

The Impact of Technology on Business Process Outsourcing

5 KFintech Platforms Driving Digital Transformation In Corporate India

August 2, 2022

KFintech has built its reputation as a dependable service provider for India’s corporate customers in a short span of time. Our mobile-first and cloud-ready platforms coupled with our software innovations, have enabled us to create an ecosystem of tools that are enabling Corporate India’s Secretarial teams to digitally transform governance in a secure, super-fast manner.

KFintech’s cutting-edge platforms such as Karisma, KPrism, Fintrak etc

offer significant reductions in Total Cost of Operation, improving investor satisfaction and client value. Our clients can choose either an ‘As-a-Service’ or a ‘Fabricate-and-Operate’ model thanks to modular architecture.

The 5 KFintech platforms which are driving digital transformation in corporate India are:

eVault – A safe, secured, reliable file and data storage platform that enables RTAs to regularly upload their data as per defined frequencies and ensure permanent data storage. This encrypted eVault supports cloud-based and hybrid data backup. eVault helps in data backup, data recovery, disaster recovery, regulatory compliance and online backup services.
E-voting / INSTAPOLL – KFin Technologies Limited has set up an electronic infrastructure, an alternative to the paper-based polling process, helping investors cast votes using an electronic method through the web. Using this simple system, shareholders can vote on resolutions of companies requiring voting through ballot as per extant rules and regulations. The system processes, records votes automatically and facilitates the declaration of voting results quickly.
eAGM – eAGMs replicate the physical General Meeting of the company on a virtual platform via Video Conferencing mode or Other Audio Video Means. It is fully compliant and created to deal with different events across various cities parallelly. In the world of meta platforming, companies can manage their AGM/EGM proceedings and facilitate fully compliant and completely digitised remote e-voting. Investors can decide on goals proposed by organisations requiring voting forms without needing to be physically present at the meeting.
FINTRAK – A highly secure, compliant and digitised platform to monitor the personal trading compliance of employees as per best practices and industry regulations. FINTRAK is a one of its kind insider trading platform. This module effectively allows corporates to maintain any insider-related data as per the requirement of SEBI in a very convenient and effective manner.
KARISMA – A web-enabled application designed to facilitate India Inc and the investors to access information with a single click. This platform connects all stakeholders on a single platform to meet every shareholder’s needs. A single-window solution reduces decision-making time and quickly makes the required information available. This helps corporations to comply with all regulatory requirements as well as proactively provide services to their investors.

KFintech is the first organization of its kind, to achieve the distinction of an ISO 9002 certification, which has now migrated to ISO 9001:2015 standards for quality management systems, certified by DNV. We are serving over 90 million investors, and process over one lakh transactions daily. KFintech has overseen two of the largest mutual fund migrations as well as a corporate register with over 15 million investors.

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The Digital Transformation of Traditional Businesses: How Your Company Can Stay Relevant

What Makes KFintech’s Corporate Registry Services Unique

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What To Do Before Investing In An IPO?

July 18, 2022

What is an IPO?

An IPO, short for Initial Public Offering, is when a private company sells its shares to the public and makes these shares tradeable on the stock market. Private companies work in collaboration with investment banks and multiple other agencies to bring their shares to the public. There are a lot of regulatory requirements that need to be fulfilled, along with a lot of patience and marketing, before an IPO can be launched.

There is always some element of risk involved with every IPO and you should always do your due diligence before investing in any of them.

Now, let’s discuss some points you should consider before investing in an IPO :

Carefully read the Red Herring Draft – The DRHP, or Draft Red Herring Prospectus, is a document that is prepared as per SEBI requirements before any company wants to go public. This document is made available publicly and is an essential resource for any potential investor. The DRHP also expounds on how the organization plans to utilize the money that will be raised, and potential risks for the investors. Investors should go through the DRHP before putting their money into a new IPO.

Use of the proceeds – It is vital to check how the proceeds raised from the IPO will be used. If an organization intends to only reimburse its debt with these funds, it’s probably not a great sign of things to come, but if it intends to raise funds to partly pay the debt, and partly to grow its business or to use it for general corporate purposes, it shows that the funds raised are being put back into the business, which is good news for an investor.

Figure out the business – An investor should understand the nature of the business of a company before investing in it. Understanding the business allows you to better judge how a company will perform given its priorities. A company’s capacity and ability to increase its market share make a significant difference to its appeal since returns and growth depend on this. On the other hand, an investor ought to avoid an IPO if the business exercises are not clear.

Who runs the company – An investor should always check who runs the company and has the power to make decisions. It is crucial to look at managers and key people of the company as they are answerable for its performance. The experience of the top management gives a glimpse into the company’s working environment.

Look for a company’s potential – An investor should analyze the potential of the company and figure out future possibilities. If a company performs well in the wake of raising capital, investors will acquire significant returns on their IPO investments. The organization that you’re investing your hard-earned money in ought to have a good plan of action to sustain itself in the future.

Relative valuation of the company – Investors should closely research the company’s competitive position. The DHRP will usually include a company’s comparisons with its peers, both on monetary numbers and valuations. An investor can look at the new IPOs’ comparative valuations to check if a company’s valuations are in line with its peers.

Investment Horizon – An investor should have a clear understanding of the investment horizon before investing in an upcoming IPO. One must be clear, whether they are planning to invest to make a quick return or if they’re looking to hold these shares for the long term. A short-term strategy depends on current market sentiments while long-term ones rely on the fundamentals of the business.

Timing is essential when you operate in the stock market. When you enter the market and when you leave it can make all the difference. Sometimes, the timing is right during the IPO and at others, it will be a smarter decision to wait. Make a decision based on how much you can make and how good the fundamentals of the business are as far as valuation is concerned.

Featured Posts

The Digital Transformation of Traditional Businesses: How Your Company Can Stay Relevant

What Makes KFintech’s Corporate Registry Services Unique

5 KFintech Platforms Driving Digital Transformation In Corporate India

The Impact of Technology on Business Process Outsourcing

Stock Market Investing For Beginners

July 4, 2022

While looking for the best way to increase the money you have saved, what’s the primary idea that seems the best? A bank account? Maybe not! Bank savings just produce fixed interest payments. Since there’s very little risk involved, the profit is likewise less. It is a good option if you need your money stored securely and need easy access to it, but you don’t end up increasing it substantially.

Investing in the stock market, however, may enable you to create a pool of reserve funds which is much more substantial. Shares/stocks are a piece of the share capital of an organisation that is owned by the investors – these shares can be traded in the stock market. You can trade both stocks and bonds on the market but investing in the stock market is the simpler and more straightforward alternative.

Does an advisor play a pivotal role?

The stock market is an exceptionally complicated world, and it is hard to predict the movement of shares, stocks, economic indicators, sectors, industries, and companies. If you want to begin investing you will need to focus intensely on learning and analysis.

If you want to start investing in stocks without prior knowledge and planning, going through an advisor is ideal. Find a legitimate advisor, and open your Demat account. This will give you access to the market, where you can start trading.

Is stock trading done by intuition?

Many new-time investors tend to approach the market from a speculator’s perspective. They invest in a stock that feels right because their instinct indicates it is. No one can, of course, predict exactly what the future holds, and you can’t foresee the fluctuation of stocks without doing serious research. You might end up being lucky once or twice, but that luck will run out sooner or later.

Your instincts will tell you that the best time to buy a stock is right after it’s value has dropped, but you have to understand that somebody is also selling the stock. Keep in mind that if the value is declining, there’s a reason behind it. Stocks as a rule respond to the general market climate, so you must know that element consistently.

Plus, it is difficult to know exactly what is going on within an organisation you choose to invest in. You can’t know about every single inner element. Be that as it may, you actually need to follow the latest news from credible platforms to get a sense of which way the winds are blowing.

What factors should be considered before investing?

The first step in making a fruitful investment is to understand your financial goals and objectives. Understand that the money you put in, is for the long term, and you will not have the option to pull it out soon. Also, there is no assurance that you will make money through your investment.

Not every person is happy taking on high risks for extra earnings. It is recommended that investors evaluate their risk appetite to guarantee that the investment made in stocks is in line with their financial objectives.

Spread your investments across multiple sectors or asset classes to minimise risks. You must strategize your asset allocation by factoring in your time horizon, risk appetite and investment goals. You can save yourself the trouble of starting from scratch and compensate for one loss with profits from another.

Stock investment decisions are not to be taken on a whim. For a beginner, that’s the most important thing to understand. Another common misconception is that investing in the stock market is a gamble. It really isn’t. It works on specific principles that require strategic thinking and deep analysis.

As always, we suggest you consult your financial advisor before making any financial decisions.

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The Digital Transformation of Traditional Businesses: How Your Company Can Stay Relevant

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5 KFintech Platforms Driving Digital Transformation In Corporate India

The Impact of Technology on Business Process Outsourcing

IPO – Terms that you must know

April 29, 2022

Initial Public Offerings, or IPOs, have been on the rise these last few years with a lot of companies going through the process recently. These IPOs have created a huge buzz, and have made a lot of investors curious and willing to invest. Though they are a fairly commonly seen term nowadays, there are a lot of industry terms that can confuse you, or worse yet, make you shy away from an excellent investment opportunity.

While it is important to know the market and which companies are launching their IPOs, it is also important to have a basic understanding of the terms that can help you navigate your way around these IPOs.

Let’s decode in layman’s terms the commonly used jargon, and hopefully make your IPO processes a little easier.

What is an IPO?

Short for Initial Public Offering, an IPO is the point where any existing company decides to invite the public to invest in them by buying their shares. The company, thereafter, gets listed on the stock exchange and is open for investment by the public, with its stock being publicly traded. Any company can only ever have one IPO, though a company may issue new shares after its IPO is completed. In case a company that is already listed on the stock exchange comes out with a new range of shares, it is known as a Further Public Offer.

Pricing and Book Building

The issue/offer price of a share is the price at which a share is distributed to the general public, before they are traded on the stock market and the price fluctuates according to market trends. The process of discovering the issuing price of the shares is known as price discovery and can be done using two methods.

The first, is called a Fixed Price Issue. In this method, the price of a share is fixed by the company (with the help of its Lead Manager) and applications for shares are invited at this fixed price.

The second method is something called book building, where bids are invited for shares, not at a fixed price, but within a range. The lower limit of this range is called the floor and the higher limit is called the cap. During the bid, you can ask for the number of shares you’d like to have and the price that you are willing to pay for them, within the price band. The actual price is then discovered based on the bids received.

What is an Allotment?

Allotment, in simple terms, can be defined as the process by which you are given shares upon your application. During the book building procedure, there are three kinds of investors who can make a bid for the shares.

The first category of investors are the Qualified Institutional Buyers (QIBs). These consist of mutual funds, and foreign institutional investors. The next is retail individual investors. Any investor that makes a bid under Rs. 50,000 can be labelled as a retail investor. The remaining shares are offered to individual investors with a high net worth (HNI) and the employees of the company.

Depending on how a company chooses to go about its price discovery, there are rules that govern what percentage of shares should be allotted to which investors. For example, if a company chooses a fixed price issue, a minimum of 50% of shares should be allotted to retail individual investors.

Once all applications are received and validated, shares are allotted to investors, with everyone who applied getting their allotments in an ideal scenario. When the number of shares applied for is greater than the actual number of shares available, the IPO is said to be oversubscribed. In these instances, shares are again allotted based on prescribed SEBI guidelines. One scenario worth discussing is if an IPO is oversubscribed to the extent that not everyone who applied during the IPO can even get one share. In these cases, final allotment is decided based on a lottery to ensure no preferential treatment.

What is a Draft Offer Document?

Any company aiming at issuing its IPO is required to file its prospectus with SEBI, which contains all the information about the company. This prospectus also tells you why the company is issuing shares for public investment purposes, along with information about the company’s financial position, and the issuing price of the shares.

The Draft Offer Document is first filed with SEBI, at a minimum of 21 days before filing it with the stock exchange. Prior to filing the Draft Offer Document with the Registrar of Companies (RoC), the document needs to be revised with all suggestions from SEBI.

What is a Red Herring Prospectus?

A Red Herring Prospectus is basically the same as a draft offer document and contains the same information, without the addition of the number of shares being issued and the price per share. The reason for the prices being undisclosed is that a red herring prospectus is used exclusively for book-building purposes.

Who is an Underwriter?

An underwriter is the entity that picks up the remaining shares at the IPO in case all shares are not subscribed to. An underwriter to an IPO can be a merchant banker, a broker, or a financial institution that has given a commitment to underwrite the issue.

In case an underwriter fails to hold up their end of the commitment of picking up the remaining shares, their licences get cancelled by SEBI.

Who are Lead Managers?

Lead managers are the entities who are responsible for acting as the intermediaries between the company and the investors, with proper validated registration from SEBI. They are merchant bankers who are in charge of the entire issue process. It is a lead manager’s role to certify an issue in accordance with the regulations and carry out due diligence that everything mentioned in the prospectus is correct.

Furthermore, they are also accountable for the book-building process, in which case, they are referred to as the Booking Running Lead Managers. Activities that come after the issue, such as the intimation of the allotments and the refunds, are also taken care of by the lead managers.

There are never any guarantees that you will get an allotment on subscribing to an IPO. However, it always helps when you’re familiar with the terms being thrown around during the process and will hopefully help your next IPO application be a little easier to navigate.

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The Digital Transformation of Traditional Businesses: How Your Company Can Stay Relevant

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Demat Accounts – A Beginner’s Guide

April 22, 2022

You are probably familiar with the idea of investing in shares and equities, which give you returns on your investment based on market fluctuations. The first thing you’ll need in order to invest in these shares and equities is a demat account. Over the past few years, you may have seen the term ‘Demat Account’ quite frequently, causing you to wonder what they were all about. Let’s try to answer a few basic questions about demat accounts.

What exactly is a demat account?

Short for dematerialisation account, a demat account is like a bank account, but instead of storing or holding your money, a demat account holds your securities in the form of shares, debentures or bonds. This information is stored in a digital format and acts as an alternative to the physical certificates that were used previously.

According to the rules set by the Stock Exchange Board of India (SEBI), in order to invest or sell securities in the stock market of India, it is mandatory for you to hold a demat account, along with a Depository Participant (DP).

Depositories and Depository Participants

A Depository is an organisation responsible for holding your securities along with facilitating your transactions. These transactions are performed by intermediaries, called Depository Participants (DP), and they act as a bridge between the depositories and the investors. In order to use the services of a depository, you are required to have a DP.

What are the different kinds of Demat accounts?

In order to understand the market and the kinds of trades that are possible within it, we need to have an understanding of the different types of Demat accounts.

Regular Demat Account: A regular demat account is meant for investors that are based in India. A regular demat account is best used when specifically dealing in equity shares. The shares that you buy are stored in the account digitally, and the ones that are sold are removed from the account. There are many depository participants that offer demat accounts, but the charges levied by each may vary.

Repatriable Demat Account: A repatriable demat is ideally meant for non-resident Indians (NRI), still want to invest or take part in the Indian markets in some way. These demat accounts allow for NRIs to invest in the Indian share markets from anywhere in the world. A repatriable demat account will need to be linked with a NRE bank account. Note that you cannot hold both a regular demat account and a repatriable demat account at the same time, since they are meant to cater to two entirely different demographics. With a repatriable demat account, an NRI can transfer up to $1 million out of the country in a calendar year.

Non-repatriable Demat Account: If you are an NRI who wants to partake in the Indian markets but does not want/have any intention to transfer the funds abroad, a non-repatriable demat account is suited for you. However, you must have an NRO linked to this type of demat account.

Trading account vs. demat account

While both trading and demat accounts are required for us to be able to invest and trade in the stock market, there are some differences between them. The main difference between a trading and a demat account is that a demat account is responsible for holding the securities and shares in an electronic format, while a trading account is responsible for providing you with an interface that allows you make trades in the stock market, which is primarily buying and selling of shares and securities. Essentially, a demat account can be said to be a storage space, while a trading account can be defined as a transactional interface.

How do you benefit from having a Demat Account?

A dematerialisation account, or a demat account serves multiple purposes, and brings a lot of benefits for a customer, a few of which are listed below:

The information about your securities and shares are held and stored securely in an electronic medium
The transaction charges associated with a demat account are significantly lesser than its physical counterpart because of not having to pay any stamp duties
Having the data stored in an electronic medium ensures speed and convenience during electronic settlements
All data being digitally stored also means that paperwork is reduced by a large margin in case of securities being transferred
The risks of theft, fraud and non delivery, associated with the certificates in case of the physical medium are eliminated
The largest advantage of having an electronic medium is the ability to make online investments and sell any number of shares according to your convenience. You can even sell one share if that is what you deem necessary.

If you are looking to start your investment journey in the stock market, get a demat account here https://ipo.kfintech.com/ with KFintech.

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Factors to consider when opening a demat account

March 26, 2022

A demat account is necessary if you want to trade in the stock market, securities or other equities. If you’ve thought about trading in the stock market, you probably already know this. A demat account is essentially, just like a bank account. The difference between them is that a bank account holds your money, while a demat account keeps your shares.

Since both these accounts concern your finances, there are several factors that you should keep in mind when opening one of them. While opening a demat account online is a fairly easy procedure, choosing the right one is not as simple. As an investor, especially if you are a beginner, there are a number of factors that you should consider before you finalize a service provider for your demat account. Let us take a look at some of these factors you must look at.

Is the legacy of the company good enough?

Whenever it comes to managing your finances, you must always consider the trust and the investor base associated with the company you choose. It is essential to look for a platform that maintains a strong base of investors, along with a presence all across the country. This ensures that your service provider of choice is trustworthy and it will help filter out operators who may not be able to deliver on the promise of excellent returns. It is best to take some time to research and do the due diligence on the legacy of your chosen depository participant, along with their customer base, the duration they have operated for, and the number of branches they operate.

Does it provide robust security?

Everything choice we make has its own set of pros and cons. While the virtual world provides several advantages, there is also a security risk that comes with it. We need to take in to account this risk, even more so when it concerns your finances. Your demat account provider must be equipped with state of the art security softwares and firewalls that can properly protect your financial information. Any data must be encrypted with the highest security levels when moving between servers.

Should you have the same demat and trading account broker?

Although most brokers operate both your demat and trading accounts, there can be scenarios, where a broker does not have a Depository Participant license, which is required for a broker to be able to open and maintain a demat account. In such cases, it is essential to submit the debit instruction slip to your broker on time after selling your shares. Failing to do so results in a bad delivery and you may end up incurring losses. Having one entity as both your broker and Depository Participant will make the procedure seamless, making your experience simpler and easier. It is definitely better to have the same broker for both types of accounts.

What are the demat charges involved?

While many services advertise that you can open a free demat account with them, it is important to understand that account opening charges are just one of the costs associated with maintaining your demat account. An annual maintenance charge may be billed to keep your account maintained. This charge is usually dependent on the valuation of shares present in your demat account. Every time you sell a share, and it gets debited to your demat account, a charge is incurred by NSDL or CDSL to the Depository Participant, which is also billed to you. You could also be charged a fee every time you request a physical statement, apart from any other charges that may be covered under the fine print. It is important to know and understand all of these charges since they are important and cannot be avoided, which will impact the returns you see from your trades.

Is the banking, broking and custody seamless?

In case your broker is a bank, the banking, broking and custody charges can be handled entirely seamlessly by the bank. The major advantage of having the same entity function as your banker and broker is that you can use NEFT, RTGS or UPI payment methods since they are usually free. Most brokers, on the other hand, charge a nominal amount in case you use an authorized payment gateway. The more seamless the process is, the easier your life gets.

Does the DP provide high quality support services?

Trading in the stock market is time sensitive and faster services result in more efficient trading and returns on investment. A Depository Participant should not be judged just on the basis of routine transactions, but also on the basis of the ancillary services they provide. You should consider the time duration taken by them to get your physical shares dematerialized and whether your account is automatically credited with corporate actions. Moreover, you should also consider the efficiency with which issues like customer complaints, lien and pledge are dealt with. Ensuring all these meet your requirements helps you get a more satisfactory service experience.

Are there pending complaints against the DP?

Through checks about the service standards of the DP are essential to judge their work hygiene and quality. A major red flag is if a Depository Participant has many pending complaints on the service level with SEBI. Furthermore, you should also ensure that there are no ongoing regulatory investigations against them. While it is true that everything you read online may not be correct, a large percentage of reviews being negative is definitely a point of concern.

If you are looking to make investments and are in need of a demat account, you can create one with KFintech here https://ipo.kfintech.com/

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