The ETF had yesterday received bids worth Rs 835 crore from seven anchor investors, including State Bank of India and insurance companies.
Sources said there was strong retail response and as much as Rs 1,000 crore has been collected today.
The ETF, through which government aims to garner Rs 3000 crore, is open for retail and other institutional buyers till March 21.
The insurers which have put in money in the ETF are LIC, Bharti Axa Life, General Insurance Corporation of India, National Insurance Company, The New India Assurance and United India Insurance.
The government had reserved Rs 900 crore for anchor investors, or those bidding for more than Rs 10 crore of shares.
As per the offer document filed by the Finance Ministry with market regulator Sebi, individual investors can invest a minimum of Rs 5,000, while the maximum limit is Rs 10 lakh for investment in CPSE ETF.
Non-institutional investors/qualified institutional buyers can invest in the scheme with a minimum investment amount of Rs 10 lakh.
The CPSE ETF basket consist of shares of 10 PSUs and provides an opportunity for investors to become part-owners of Oil & Natural Gas Corp, GAIL India, Coal India, Indian Oil, Oil India, Power Finance Corp, Rural Electrification Corp, Container Corp, Engineers India and Bharat Electronics.
The fund is managed by Goldman Sachs and will be listed on the stock exchanges in the form of an ETF. The ETF is an open-ended fund and the units have a face value of Rs 10 each.
The government has raised about Rs 13,119 crore from disinvestment so far in this financial year. A successful subscription of the ETF would help the exchequer get richer by Rs 3,000 crore.
This would help the government meet the revised disinvestment target of Rs 16,027 crore. In the interim Budget for 2014-15, the government lowered the PSU stake sale target from Rs 40,000 crore to Rs 16,027 crore.
An ETF is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange.
Assets under management of ETFs in India have gone up to Rs 11,807 crore in September 2013 from Rs 1,396 crore in March 2009.