When demat combines with internet banking and online trading, it creates one large and seamless chain of transactions that is simple, quick and efficient. The buy transaction in your trading account, the debit from your bank account and the subsequent credit to your demat account happens seamlessly without any efforts from your side. Same is the case when you sell shares. What is applicable to secondary markets gets extended to the IPO market also. First, let us understand what the situation was like before. Typically, you would wait in a queue to get the form, then wait in a queue at the collecting bank to submit the form. After you submit the form, you just wait sometimes for about 2-3 months. Your account is already debited in the meantime. After 3 months you either get shares or you get refund order. So if you get refund means you have lost interest for nearly 3-4 months. You can sell shares only after that. Many times, you did not get a refund for 4 months and had to chase the registrar for another few months.
Demat has made a big difference to IPO investment. With shares being directly credited into your demat account on the allotment, the shares are now available for selling from the day of listing itself. The entire process of allotment and credit demat account from the date of closure of listing is taken less than 7 days. That facility was not available under the physical certificate system. In short, demat accounts have made your entire portfolio of investments available to you on your smartphone. You can operate from anywhere and at any time apart from the other benefits of the demat account!