CPSE ETF: Anchor investors’ portion subscribed 7.5 times

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Mumbai | Published: March 15, 2017 3:46:21 AM

The third tranche of the government’s exchange traded fund of top 10 state-owned companies on Tuesday attracted robust bids with the portion reserved for anchor investors getting subscribed over 7.5 times to the tune of Rs 5,700 crore on the opening day.

The government is looking to raise Rs 2,500 crore from the third sale of the CPSE ETF. (Reuters)

The third tranche of the government’s exchange traded fund of top 10 state-owned companies on Tuesday attracted robust bids with the portion reserved for anchor investors getting subscribed over 7.5 times to the tune of Rs 5,700 crore on the opening day. 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 government is looking to raise Rs 2,500 crore from the third sale of the CPSE ETF.

All categories of investors applying for the ETF will get a discount of 3.5%. 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 Rs 13,802 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.

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The inaugural issue of the CPSE ETF was launched in 2014 and had raised Rs 4,300 crore. The ETF was managed by Goldman Sachs Asset Management, The second tranche was managed by Reliance Mutual Fund, which operates the ETF after it bought over Goldman Sachs’ mutual fund business in the country in 2015.

The government had budgeted to raise Rs 56,500 crore in FY 17 through divestments in PSUs and the strategic sale of shares. The target has been revised to Rs 45,500 crore.So far the government has raised Rs 39,368.69 crore through buybacks and stake sale in PSUs, and sale of government’s holdings ITC and L&T.

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