Listing gains for Bharat 22 ETF; ‘Buy’ it now if you missed the NFO

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Updated: November 28, 2017 10:38:30 AM

Bharat 22 ETF jumped more than 3.5% on Tuesday after making a decent debut at Rs 36.3 on BSE. While some investors may have missed the NFO, many top experts had advised it as a long-term investment.

Bharat 22 ETF jumped more than 3.5% on Tuesday after making a decent debut at Rs 36.3 on BSE. (Image: Reuters)

Bharat 22 ETF jumped more than 3.5% on Tuesday after making a decent debut at Rs 36.3 on BSE, more than 0.9% premium to its issue price of Rs 35.97. The open-ended fund was trading at Rs 37.22 on Tuesday morning. The ETF has been included in the BSE B group of securities with a scrip code 540787.  The much-awaited Bharat 22 Exchange Traded Fund (ETF) which opened for subscription earlier this month, got subscribed by nearly 4 times, helping the government to raise the issue size to Rs 14,500 crore and further moving towards its disinvestment target for the year. The government had launched the ETF with the larger objective to raise Rs 72,500 crore through disinvestment in the current financial year 2017-18, by selling equity stakes in blue-chip state-run firms and few private sector companies.

The Rs 8,000 crore public issue received bids to the tune of Rs 32,000 crore, according to department of investment and public asset management (DIPAM) secretary Neeraj Kumar Gupta. “The issue saw huge demand from FIIs,” Neeraj Kumar Gupta told adding that this indicates rising confidence in India growth story.

While some investors may have missed the NFO, many top experts had advised it as a long-term investment. “We believe the ETF offers an attractive long-term investment opportunity to partake in the India growth story by way of a diversified blend of companies spread across several sectors and are available at an attractive valuation and a good subscription discount,” ICICI Prudential AMC MD and CEO Nimesh Shah had said.

On similar lines, Mr Mayuresh Joshi, Fund Manager, Angel Broking pointed out, “Bharat 22 ETF is an interesting composition of mostly profit-making, dividend-paying public sector companies and some shares of blue-chip companies. ETFs are a relatively safer long-term investment avenue as they can spread their risk across quality companies. Even fund managers with long-term term savings funds prefer ETFs. Hence, Bharat 22 is a good investment option for individual investors who want to make a long-term investment and reap better returns from the stock market without buying shares directly.”

The mega ETF includes as many as six sectors ranging from finance and utilities to FMCG. In the index, L&T has the highest weightage, followed by ITC and SBI.  The well-diversified ETF has stocks of basic materials accounting for 4.4 per cent of its weightage, energy 17.5 per cent, finance 20.3 per cent, industrials 22.6 per cent, FMCG 15.2 per cent and utilities 20 per cent. The weightage of each individual stock in the Index is capped at 15 per cent and each sector in the index is capped at 20 per cent.

The government had offered a 3% discount to all category of investors on reference market price. “The ETF is a very innovative idea to capture the growth story of six most prominent sectors: Banking, FMCG, energy, industrial, basic materials and utilities,” Neeraj Kumar Gupta had earlier told Financial Express.

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