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  1. Modi government’s FY19 disinvestment: Bharat-22 ETF follow-on offer could be worth Rs 10,000 crore

Modi government’s FY19 disinvestment: Bharat-22 ETF follow-on offer could be worth Rs 10,000 crore

The Finance Ministry may come out with an Rs 10,000-crore follow-on fund offer of the Bharat-22 exchange-traded fund (ETF) as it looks to dilute stake in Coal India to meet the minimum public holding norm.

By: | Published: April 17, 2018 2:12 PM
The fund had garnered bids to the tune of Rs 32,000 crore, although the government retained only Rs 14,500 crore. (Image: Reuters)

The Finance Ministry may come out with an Rs 10,000-crore follow-on fund offer of the Bharat-22 exchange-traded fund (ETF) as it looks to dilute stake in Coal India to meet the minimum public holding norm. Besides, the ministry is keen to take the ETF route to sell off government shares held through SUUTI in private companies — ITC, Axis Bank and L&T, an official told PTI. The government had in November last year launched Bharat-22 ETF comprising shares of 22 companies, including public sector undertakings (PSUs), public sector banks, ITC, Axis Bank and L&T.

The fund had garnered bids to the tune of Rs 32,000 crore, although the government retained only Rs 14,500 crore. An official said the ETF route is a safer mode of disinvestment as it shields investors against stock market volatility. “Based on the current composition of the Bharat-22 ETF, the leg room for a follow-on fund offer would be around Rs 10,000 crore,” the official added. The state-owned companies or PSUs that are part of the new Bharat ETF-22 include ONGC, IOC, SBI, BPCL, Coal India and Nalco.

The other central public sector enterprises on the list are Bharat Electronics, Engineers India, NBCC, NTPC, NHPC, SJVNL, GAIL, PGCIL and NLC India. Only three public sector banks — SBI, Indian Bank and Bank of Baroda — figure in the Bharat-22 index.

The official said by using the ETF route, the government may dilute about 3.55 per cent stake held in Coal India to comply with the minimum 25 per cent public float requirement as mandated by market regulator Sebi. The government plans to raise Rs 80,000 crore in the current fiscal from disinvestment, lower than over Rs 1 lakh crore raised last year.

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