Since it takes a minimum of 15 days to dematerialise a share which is registered in the name of the owner, there could be great confusion on October 15. From that date, the institutions - FIIs, FIs, mutual funds, banks and OCBs - will not be able to sell Colgate and Bhel shares in the physical form. (They can, however, buy in the physical segment).

Institutions have been mandated to sell only demat shares. For lack of liquidity in the demat segment institutions have been allowed to buy in physical form but they would need to dematerialise the shares if they intend to sell them.

Both these scrips are part of the Sensex andthe S&P CNX Nifty indices and are currently the only two index scrips which have not signed up with NSDL to provide the facility to investors.

Sebi had announced on July 17 that these two scrips would form part of the fourth list of 60 securities where institutions would trade only in demat shares. The deadline set was October 15.

There were seven companies (including these two) which had not signed up with NSDL as on that date. The other five are HMT, Hindustan Zinc, Bharat Electronic, Bharat Earth Movers Ltd and IBP.

The idea of including these stocks in the demat list was to push the companies to sign up fast as the intention was to get all Sensex and S&P CNX Nifty stocks in the depository mode.

When contacted, NSDL managing director CB Bhave confirmed that Colgate and Bhel had not signed up yet with the depository. ``They have conveyed to us that they would do so shortly,'' said Bhave.

He declined to comment on what would happen on October 15, when institutions may plan to sell their shares butmay have only paper shares in their possession.

``This is a matter for Sebi to look into,'' he said. ``Once they decide to sign up it should not take much time for them to get connectivity. They could go through a registrar which is connected to the depository,'' said Bhave. Sebi's executive director in-charge of depositories, Pratip Kar, was not available for comment as he was on leave.

Sources, however, pointed out that Sebi may be forced to push back the deadline for these two securities. The other viewpoint is that since institutions anyway wait till the deadline to actually offer shares for demat, a crisis could be averted if the two companies sign up.