The third tranche of the Central Public Sector Enterprises’ Exchange-Traded Fund (CPSE-ETF) saw subscription worth R9,200 crore as of Friday.This is over 3.7 times against the issue size of R2,500 crore. The institutional portion was subscribed 7.6 times – with subscription worth R5,700 crore against R750 crore.
The retail portion was subscribed by two times with retail bid worth R3,500 crore against the offer of R1,750 crore.
“We, at Reliance, are delighted to have raised subscription interest of over R23,000 crore in the ETF in last two months, leading to disinvestment of R8,500 crore. This clearly shows the future potential of fund raising through ETFs,” said Sundeep Sikka, ED and CEO, Reliance Mutual Fund.
The third tranche of CPSE ETF is managed by Reliance Mutual Fund, which operates the ETF after it bought over Goldman Sachs’ mutual fund business in the country in 2015. The inaugural issue of the CPSE ETF was launched in 2014 and had raised R4,300 crore. The ETF was managed by Goldman Sachs Asset Management.
On Tuesday anchor investors put in bids of R5,700 crore – over 7.5 times against the amount of R750 crore reserved for them – in the third tranche of CPSE ETF.
The investors who participated in the anchor allotment on Tuesday include BNP Paribas, Morgan Stanley, SocGen, CitiGroup, LIC, Exide Insurance, SBI Bank, Axis Bank and Canara Bank.
The second tranche of CPSE ETF, which opened for subscriptions from January 17 to January 20, was oversubscribed by 2.30 times, with bids worth R13,802 crore pouring in against the issue size of R6,000 crore.
The CPSE ETF, comprises scrips of 10 PSUs — ONGC, Coal India, IOC, GAIL (India), Oil India, PFC, Bharat Electronics, REC, Engineers India and Container Corporation of India.
ETF is a marketable security that tracks a basket of assets such as stocks. Unlike mutual funds, it trades like a stock.
The Centre had budgeted to raise R56,500 crore in FY17 through divestments in PSUs and the strategic sale of shares. The target has been revised to R45,500 crore. So far, the Centre has raised R39,368.69 crore through buybacks, stake sale in PSUs, and sale of government’s holdings ITC and L& T.