Bharat-22 ETF additional sale opens, government to raise at least Rs 3500 crore

Bharat-22 ETF additional sale opens, government to raise at least Rs 3500 crore
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New Delhi, Feb 14: An additional offering of Bharat 22 ETF (Exchange Traded Fund) will be open for subscription only for a day on Thursday to raise at least Rs 3,500 crore. Applications will be accepted till 8 pm.
Both institutional and retail investors can participate in the single day ETF sale. The proceeds from the ETF sale would help the government move towards meeting the Rs 80,000 crore disinvestment target set for the current fiscal.
So far, the government has mopped up approximately Rs 36,000 crore by paring minority stake in public sector companies, and through ETFs.
Conventionally, the follow-on fund offer (FFO) of an ETF remains open for four days in which the first day of the sale is reserved for anchor investors. The next three days are kept open for subscription from retail and other institutional investors.
Since this is an additional on-tap offering of Bharat-22 ETF, the issue would open for a single day for both institutional and retail buyers. The government has so far raised Rs 22,900 crore through the Bharat-22 ETF. While Rs 14,500 crore was raised in November 2017, another Rs 8,400 crore was raised in June 2018.
The central public sector enterprises (CPSEs) that are part of the ETF include ONGC, IOC, SBI, BPCL, Coal India and Nalco.
Other constituents include 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. Also, the government’s strategic holding in Axis Bank, ITC and L&T, held through Specified Undertaking of Unit Trust of India (SUUTI), has been put in the ETF basket.
This would be the second ETF offering by the government in the current fiscal which ends in March. In November last year, the government had raised Rs 17,300 crore through a follow-on offer of another exchange traded fund — CPSE ETF, which comprises shares of 11 public sector enterprises. This was the biggest-ever fund raising from an ETF domestically.