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Non-Tech : ICICI Ltd - (Nyse: IC) -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (348)	3/8/2000 9:30:00 PM
From: Mohan Marette	Respond to of 494

Pru-ICICI tax plan to give Rs 6 a unit Aabhas Pandya New Delhi, March 8: With the tax-planning season at its peak, dividend payouts in equity linked tax planners is beginning to catch on in the fund industry. After Kothari Pioneer Taxshield, Prudential-ICICI Asset Management Company has doled out a 60 per cent dividend (Rs 6 per unit) in its tax plan. Besides Prudential ICICI's Tax Plan, the AMC will shortly declare a dividend in its equity, FMCG and balanced funds. The ELSS from Prudential-ICICI has a net asset value of Rs 26.73 as on March 6, 2000 and the fund has generated a return of 167 per cent since its inception in August, 1999. The dividend of 60 per cent will be the first payout from the fund. Equity linked tax planning schemes give tax rebate under section 88 with an investment limit of Rs 10,000. Thus, an investor can save a maximum of Rs 2,000 (20 per cent of Rs 10,000) in an ELSS. If an investor puts money in Prudential-ICICI Tax Plan at the current NAV (Rs 26.73), he will be allotted 374.11 units. Based on the payout of 60 per cent, the investor will receive a tax-free dividend of 2244. Since the investor also saves Rs 2,000 on his overall tax liability, his actual investment will only be Rs 5756. Thus, this gives a tax-adjusted yield of 42.44 per cent. After Prudential and Kothari, Birla AMC is also expected to declare a dividend in its tax planner. The NAV of Birla tax plan is currently hovering around Rs 39. Since investments in a tax plan requires a lock-in of funds for three years, there will be no dividend stripping in the fund. As on January 31, 2000, the fund has a corpus of Rs 127 crore and the top five holdings are Himachal Futuristic, Infosys, Mastek, Satyam and Zee Telefilms. In the case of dividend options of equity, balanced and FMCG funds, Prudential-ICICI* has imposed an exit load of 2.5 per cent to discourage dividend stripping. The exit load of 2.5 per cent will be applicable on investments made between March 8 and March 17 (both days inclusive) if these are redeemed on or before May 30, 2000. The NAV of the growth plan is around Rs 35 while the balanced fund has a NAV of Rs 16.80. The NAV of the FMCG Fund is Rs 11.68 as on March 6. In a novel move, Prudential-ICICI* has decided that the money on account of the exit load will go back to the concerned fund and show in the NAV. The normal practice is that the money generated by the load factor goes to the AMC -Financial Times