In a letter to all its shareholders, HDFC has said all its shareholders could avail of the facility if they decide to open their depository accounts with the three DPs. The two bank DPs, HDFC Bank and Times Bank have, however, in a marketing strategy decided to offer the facility only if the investor also opens a savings bank account with the bank, which would be accompanied with an ATM facility free of cost.

The facility to HDFC shareholders comes into effect from December 15 onwards and will be in operation for two years, i.e, upto December 15, 2000. The facility would be open for shareholders who havedematerialised their shares before December 15.

"As you would observe from the above, in case you do not buy or sell shares of HDFC and keep the same in a depository account with any of the aforesaid DPs and also agree to receive statements of your account once every qaurter, then for the next two years, no charges whatsoever will have to be borne by you," HDFC has told its shareholders.

Apart from custody, dematerialisation and account opening charges, the DPs have agreed to lower transaction charges. HDFC Bank will levy a transaction charge of 0.08 per cent on purchase of shares against 0.10 per cent in other cases. Times Bank will charge 0.09 per cent while Integrated Enterprises would levy a charge of 0.07 per cent on a purchase transaction.

The charges levied on sale of shares by the three DPs would be 0.02 per cent, 0.03 per cent and 0.02 per cent respectively, which does not mark any change from the existing charges.

The deal struck by HDFC is the first of its kind where a company has workedout a cost package for its shareholders outside similar packages outlined by the National Securities Depository Ltd or that by individual DPs.

NSDL has a package under which a company makes a one-time payment to the depository and in turn, custody charge is waived off for the company's shareholders. HDFC has, however, gone a step ahead and worked out its own package with the DPs, which covers not just custody charges but also account opening and dematerialisation charge as well. Interestingly, more than 50 per cent of the HDFC shareholding is already in dematerialised form and it is expected that with a package like this, the scrip would see a sizeable shareholding base in the demat mode before the January 4 deadline.

ICICI offers similar facility

ICICI has undertaken a somewhat similar exercise and has decided to waive off account opening, dematerialisation and custody charge for its shareholders. The facility is being extended to shareholders of ICICI Banking Corporation as well for accountsopened with ICICI which is a depository participant.

In a press statement issued on Tuesday, ICICI has said that the move follows the inclusion of ICICI in the mandatory demat trading list from January 4 onwards. The accounts would have to be opened with ICICI, which is also a depository participant. The facility would be offered through ICICI group outlets in Mumbai, such as ICICI Bank, ICICI Investors Services and ICICI Custodial Services effective from January 1, 1999. These facilities would be made available to other centres subsequently.