Delisting is a regulated process where a company’s shares are removed from the exchange. During this phase, shareholders must complete steps such as tendering their shares, which requires secure authorisation for debiting securities. The TPIN serves as this added security layer, ensuring transactions are processed safely and correctly.
What a TPIN Is
A TPIN (Transaction Personal Identification Number) is a secure, six-digit authorisation code generated by the depository. It is used to authenticate the transfer, debit, or pledge of securities from a demat account.
Purpose of a Transaction Personal Identification Number
- Provides an additional validation layer for transactions
- Replaces or complements older methods such as Power of Attorney
- Helps ensure that only the rightful account holder can authorise debits
- Enhances security during sensitive or high-volume processes
The Transaction Personal Identification Number helps strengthen protection against unauthorised access or misuse of demat securities.
Understanding the Delisting of Shares
The delisting of shares refers to the removal of a company’s securities from a recognised stock exchange. Delisting may be voluntary or regulatory. Regardless of the type, shareholders are provided with an exit mechanism, often through an offer process.
Key Steps in Delisting
- Announcement of delisting proposal
- Approval from shareholders and regulators
- Price discovery (in specific cases)
- Opening of exit offer for shareholders
- Settlement of shares tendered in the process
During the exit window, shareholders may need to tender their holdings, which requires authorised debit from their demat accounts.
Why TPIN Matters in Delisting Transactions
Essential for Authorising Tendering of Shares
To participate in the exit offer during the delisting process, holders must allow their securities to be debited from their demat account. The transaction personal identification number ensures this authorisation is authenticated securely.
Ensures Secure Debit Instructions
When shares are tendered, the DP or the platform handling the delisting process sends a request for securities to be debited. The transaction personal identification number confirms that the account holder has approved this transaction.
Reduces Dependence on Power of Attorney
Earlier, many account holders relied on a signed Power of Attorney (PoA) for authorising share debits. Transaction personal identification numbers reduce the need for PoA-based transactions, providing added transparency and control to demat users.
Helps Prevent Unauthorised Transfers
During delisting events, transaction volumes can rise as shareholders tender their holdings. The transaction personal identification number serves as a safeguard to ensure only verified instructions execute.
How TPIN Works During Delisting
Here’s how it works:
1. TPIN Generation
Account holders generate their transaction personal identification number through the depository’s portal or through their DP’s interface. This process includes OTP-based verification to ensure secure issuance.
2. Tendering Shares
When the delisting exit window opens, investors wishing to tender shares initiate the process through their broker or the designated online platform.
3. Providing Authorisation
The system requests authentication through either:
- Transaction personal identification number validation
- e-DIS (electronic delivery instruction slip) linked with the transaction personal identification number. The investor inputs this to confirm the debit of shares.
4. Execution of Debit
Once authorised, the depository processes the debit of shares on the settlement date and credits them to the escrow account or designated counterparty as per the delisting procedure.
TPIN and e-DIS: How They Work Together
Both are used in collaboration as a digital instruction facility enabling investors to approve share debits online.
Together, they ensure:
- Secure approval of each transaction
- No need for physical signatures
- Real-time authentication
- Compliance with depository regulations
This becomes particularly relevant during corporate events such as the delisting of shares, where timely and accurate instructions are important.
Benefits of TPIN in Delisting Scenarios
Here are few of its benefits:
Enhanced Control
Investors remain in complete control of authorising share debits, reducing dependency on intermediaries.
Greater Transparency
Each debit request is explicitly validated, creating a clear audit trail.
Reduced Processing Risks
Digital authorisation helps minimise manual errors that may otherwise arise in high-volume periods.
Regulatory Alignment
The usage of transaction personal identification number aligns with depository and regulatory guidelines for secure demat operations.
Common Misconceptions
A TPIN is simply an authorisation code for verifying transactions, not a factor that affects delisting outcomes.
Authorisation Code Does Not Influence Delisting Price
It only permits transactions and does not determine the offer price or terms of the delisting.
Authorisation Code Does Not Guarantee Acceptance
Tendered shares are processed as per delisting regulations, which operate independently of this verification step.
Authorisation Code Is Not an Advisory Tool
Using or generating it is a security requirement, not an investment decision.
Conclusion
The transaction personal identification number acts as a secure authorisation tool ensuring that share debits during corporate events, including the delisting of shares, are executed accurately and safely. While the TPIN does not influence delisting outcomes or financial decisions, it plays a major role in enabling verified and transparent processing of demat transactions. Understanding its role strengthens awareness of how depository systems maintain security during important corporate events.
