Gic Mf Plans First Ever Demat Scheme

GIC Mutual Fund is planning an exchange offer under a new demat scheme. According to chief executive officer A R Prabhu, the scheme will be an unique opportunity for investors to bring in shares held by them in physical form and exchange them for units of the scheme.

The mutual fund will later dematerialise these holdings. The GIC Demat Scheme 98, as it will be called, is slated for a launch in March.

The asset management company board has cleared the proposal for such a scheme and we will put up our plan to Sebi. It will be an open-ended growth scheme and would be beneficial for investors having odd-lot shares. They can submit shares and exchange them for units of equivalent value. The shares can be presented in physical as well as demat form. The scheme will also give a major boost to dematerialisation process, he said.

 

The minimum target corpus for the scheme will be Rs 25 crore and it will be open-ended six months after closure. The mutual fund will also announce a list of securities which would be accepted under the offer

We plan to have a sort of index fund through these securities. Most of the chosen scrips will be the ones in which trading is possible through the depository, he added.

In case of any shortfall in the amount for the shares deposited, it will be rounded off through cash payment by the investor. For example, if investors were to bring in 20 shares of any company and the price of each share is Rs 80, then the value of these shares comes to Rs 1600.

The investor can pay Rs 400 in cash so that we can issue him 200 units under the scheme, Prabhu explained.

Besides the demat scheme, GIC Mutual Fund is also planning to launch an open-ended income scheme in March. He also said that the GIC Growth Plan II has received the approval of unitholders to go open-ended from March 18. The final document will be submitted to Sebi soon.