What do we understand by odd lot shares? In the physical shares, every stock had a lot. For example, ACC had a lot size of letting us say 50 shares. That means you can only buy and sell ACC in lots of 50 shares. If you had shares less than 50 it would classify as an odd lot. Odd lots were traded separately and investors had to either sell it as odd lots or consolidate it and make it normal lots. That was quite strenuous.
Demat addresses the odd-lot problem which used to be a major hassle in physical certificates. You could buy and sell shares only in specific lots of 50 or 100 shares. In case of high priced shares, the odd-lot requirement kept most of the small investors out of its ambit. In the demat system, you can even buy or sell just 1 share of the company. From the standpoint of a small investor, demat is a lot friendlier. Demat addresses the odd lot problem at two levels. Firstly, there is no question of odd lot buying and selling at all. IN demat you can technically even buy 1 share of any stock or sell 1 share of any stock. The second aspect is what if you have odd lots of shares in physical shares. You must be wondering what to do. The answer is simple. You can just send the odd lot shares to the DP with your Demat request form (DRF) and the number of shares is automatically credited into your demat account. The problem of odd lots is totally removed in demat.