While officials were unwilling to commit themselves to any target corpus, sources said that they were optimistic of mobilising an amount upwards of Rs 500 crore.

The fund managers expect the scheme to do well in small towns where due to unavailability of VSAT (very small aperture terminals) connectivity investors are unable to get access to depository participants and invest in demat scrips. The scheme, said officials, will provide an opportunity to investors to participate in paperless trading by converting their holdings in shares of select companies that are available for dematerialisation, into units of the scheme.

The scheme isessentially open-ended (entry and exit can take place at any time) with the units being initially offered at Rs 10 each. GICMF officials explained that with demat trading being compulsory and more scrips set to be dematerialised in the new year, it made sense to bring out a scheme which could offer investors access to the latest technology.

Investors can also exercise the option of holding their units either in physical or paper form through conventional statement of accounts or in dematerialised form.

The scheme is growth oriented, long term capital appreciation being the objective. Dividend income is subject to tax deduction at source but for long term capital gains exemptions are available under sections 54EA and 54EB of the Income Tax Act subject to lock-in periods of three and seven years respectively. The net asset value will be declared on a daily basis.This is the second scheme lined up by GICMF -- the other scheme `GIC Money Back Plus' is also scheduled to hit the market sometime this month. Boththe schemes have been put up to the Securities and Exchange Board of India (SEBI) for approval and Kaimal said that they were expecting the approval for the money back scheme sometime this week.

For the demat scheme, the fund is planning to launch an aggressive marketing campaign along with a programme to educate its agents and investors.``The general public has to be educated about the benefits of demat trading and how it functions,'' said officials.