Of course, they do because 100% of all stock market clearing and settlement happens in demat mode only. That means for every trade, the 2 principal depositories viz. NSD and CDSL have to be involved. The two depositories of the Indian share market - National Securities Depositories Limited (NSDL) and Central Depositories Services Limited (CDSL) - are responsible for the transfer of shares which is done in dematerialized form.
The required securities are made available through the pool account of members/custodians with the depository participants (brokers, banks, investment firms, etc.) according to the prescribed pay-in time of the securities. The depository then transfers the shares from the pool account of custodians/members to the account of the other party according to the prescribed pay-out day.
The investor is informed electronically about his/her obligations regarding the fund transfer on the pay-in day. He/she ensures that the required funds are available in his/her account so that they can be transferred to the concerned company. The funds' obligation file is then forwarded to the clearing bank by the clearing agency which debits the account of the investor and credits the account of the clearing agency.
The clearing agency, after clearing the obligations, moves to the next step of settlement and credits the funds from its account to the account of the company and credits the shares into the account of the investor.
The trading cycle is the most crucial processes that enable an effortless transaction between the investor and the company. The process has evolved over time, and 99% of the total turnover is settled in electronic form, making it quick and easy.