This is because investors may see little value in dematerialising the ten stocks considering the low prices and dividend yields which these companies have been offering the investors.

Thus holding these shares in either physical or the demat form has little meaning for the investors, least of all if they need to spend an additional charge of dematerialising these securities.

Investors may thus prefer to acquire these shares only in demat form but owing to the absence of liquidity they might well be forced to take a fresh position post January 4, when liquidityis expected to be restored to the segment. Moreover, while the stocks are quoting at the lowest ebb, the dividend payout record is also not encouraging.

"If the company pays a dividend of mere 10-15 per cent, it is not enough to cancel off the cost involved in dematerialising the stocks," explained a fund manager with a leading FII brokerage, in the light of the market performance of these stocks.

The recession in the economy coupled with the lacklustre atmosphere in the stock markets has once again hit the small investors.

"In such a scenario where the disillusioned investors seem to be making all attempts to move out of the stock markets, the Sebi move as usual come at the wrong time," the fund manager added.

Interestingly of the ten stocks shortlisted by Sebi about 95 per cent of these stocks are quoting at the lowest levels on account of huge liquidation by both retail and institutional investors.

While the recession in the commodity sector seems to have left a negative impact on theperformances of Larsen, the rising NPA's and falling profits has hit the others like SBI, ICICI and IDBI.

An interesting observation has also been made by a section of the market analysts, who hint at the positive correlation between the performance of these companies and the growth of the economy.

"Sebi seems to have ignored the pre-requisites which have to be in place even before the implementation of such a measure. The regulator needs to study the cost impact on the broking fraternity and the investors at large" explained a BSE broker. Another observation throws some light on the crucial aspect of how many investors are actually geared to move into the reforms processs.

Of the 60 million registered investors, only 20,000 investors have opened their DP accounts. "For the success of such a measure, Sebi needs to acheive a critical mass response, reduce the cost involved in demat trading," commented a BSE broker. However, considering the charges both transaction and custody which are involved inreaping the benefits of trading in demat stocks, experts explain that the cost is purely a miniscule figure.