So far, more than 20 open-end equity funds have made payouts after dividend from open-end equity funds was made tax-free in the budget for fiscal 2000. However, these funds have first announced the dividend and then the record date. In the case of GIC Growth Plus II, the AMC has announced the record date and book closure (between October 21 and October 28) while the quantum of the payout will be known only on October 28.

``GIC Mutual Fund is trying to attract fresh investments by propagating the expected level of payout. For an investor who locks his funds, there will be uncertainty regarding the dividend,'' said an analyst.

According to industry sources, the AMC is aiming at collections of up to Rs 50 crore till the record date of October 21. In the event of collections going past the Rs 50 crore mark, the trustees have the right to suspend sale of units.

GIC Growth Plus II has a current size of over Rs 175 crore with the net asset value at Rs 18.21 as on October 7, 1999. Based on the current corpus and assuming the payout at 30 per cent, the fund will have to shell out dividend in the vicinity of Rs 30 crore. In a rising market, the fund has been able to generate substantial liquid assets by booking profits. Since January 1, 1999, the NAV of the fund has risen by more than 100 per cent in nine months.

If the AMC declares a 30 per cent dividend, it will be one of the highest payouts in the industry. Kothari Pioneer's IT Fund paid the highest-ever dividend of 40 per cent (Rs 4) recently. Given the indicated quantum of payout, GIC Growth Plus II could see high networth investors parking short-term money for dividend stripping. GIC Growth Plus has an entry load of 2 per cent. As on March 31, 1999, the top ten equity holdings were Aptech, ACC, BSES, Bajaj Auto, Bajaj Tempo, Bank of India, Bausch & Lomb, Castrol, Colour Chem and Concor.