InvestorQ : Who is the issuer of shares that can be held in the demat account?
ishika Banerjee made post

Who is the issuer of shares that can be held in the demat account?

Bhavika Nehru answered.
3 years ago

An “Issuer” means any entity such as a corporate / state or central government organizations issuing securities which can be held by the depository in electronic form. There are few things for you to understand here. In fact, it is better to get the full process flow… The issue is a company or business or any other organization that can issue shares and other securities for raising money from the public. Companies typically issue shares when they want to raise money. For example, Tata Steel may want to set up a new steel plant or Flipkart may one day look to raise money from the Indian public. These types of companies are the issuers. They issue or originate the shares. Once the shares are originated, they are held with the DP in demat form. Check the IPO announcement below:

This pertains to the IPO announcement of Sai Silks, a company registered in India. Before the shares get listed they will be credited to the demat accounts of all the holders of the shares. Only after that, the shares can get listed and the trading can commence. In this case, Sai Silks is the issuer. The company will issue shares to raise money from the public after which they will become shareholders of the company. So, Sai Silks becomes the issuer; the investors become the shareholders and these shares will be held in the demat account of the investors.