Reliance MF launches CPSE ETF 4th tranche; key things about Rs 8,000 crore disinvestment offer

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Updated: November 20, 2018 2:57:28 PM

Anil Ambani-led Reliance Mutual Fund (RMF) has announced Further Fund Offer 3 (FFO3) of its Central Public Sector Enterprises - Exchange Traded Fund (CPSE ETF) under the Narendra Modi-led government’s larger disinvestment drive.

This latest fund offer is part of the government’s overall disinvestment program using the ETF route. Reliance Mutual Fund looks to raise upto Rs 8,000 crore.

Anil Ambani-led Reliance Mutual Fund (RMF) has announced Further Fund Offer 3 (FFO3) of its Central Public Sector Enterprises – Exchange Traded Fund (CPSE ETF) under the Narendra Modi-led government’s larger disinvestment drive. This latest fund offer is part of the government’s overall disinvestment program using the ETF route. Reliance Mutual Fund looks to raise upto Rs 8,000 crore (US$ 1.12 Billion) in FFO3 as “Initial Amount” plus an “Additional Amount” (if any) based on instructions of the government.

“We are delighted to announce the CPSE ETF FFO3. It offers a compelling opportunity for investors, especially retail and retirement funds, to invest in the India growth story at an attractive valuation, low expense and embedded discounts”, said Mr Sundeep Sikka, ED and CEO, Reliance Nippon Life Asset Management.

The FFO3 is open for all categories of investors including Anchor Investors, Retail Investors, Retirement Funds, QIBs, Non-institutional investors and Foreign Portfolio Investor (FPIs). As part of the FFO3, an upfront discount of 4.5% is being offered to all categories of investors, Reliance Mutual Fund said a press release. 

“We would like to reach out to retirement funds to invest in FFO3 and consider this as an opportunity to secure their funds and benefit from the growth of these PSUs – some of which are Navratnas, Maharatnas, Miniratnas and are either sector leaders or near monopolies in their respective sectors”, Sudeep Sikka added.

What is CPSE ETF?

CPSE ETF is a passive investment fund that was created to help the government in its disinvestment program of divesting stake in select Central Public Sector Enterprises (CPSE) through Exchange Traded Funds (ETF). The fund invests in the Nifty CPSE Index stocks – that includes eleven PSU companies selected on the basis of established track record, government holding, market capitalisation, dividend history, sector representation, etc. – in the same proportion and weightage as of the index.

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