Reliance Nippon AMC files draft papers for fourth tranche of CPSE ETF

Govt has already appointed ICICI Securities as the advisor for the fourth tranche of CPSE ETF

Reliance Nippon Life Asset Management (RNAM) has filed draft papers with capital markets watchdog Sebi for the fourth tranche of CPSE Exchange Traded Fund.

Through the three tranches of CPSE ETF, the government has already raised Rs 115 billion -- Rs 30 billion from the first tranche in March 2014, Rs 60 billion from the second tranche in January 2017 and Rs 25 billion from the third tranche in March 2017.

CPSE ETF, which functions like a mutual fund scheme, comprises scrips of 10 PSUs -- ONGC, Coal India, IOC, Gail India, Oil India, PFC, Bharat Electronics, REC, Engineers India and Container Corporation of India.

The fund-raising will help the government inch towards Rs 800 billion disinvestment target for the current fiscal. It has mopped up over Rs 90 billion so far.

As per draft documents filed with the Securities and Exchange Board of India (Sebi), RNAM has applied for the third FFO (Further Fund offer) of the Central Public Sector Enterprises, Exchange Traded Fund or CPSE ETF.

The government has already appointed ICICI Securities as the advisor for the fourth tranche of CPSE ETF.

The advisor would be required to advise the government in all aspects of the launching of the proposed follow-on fund offer or tap or tranche of the CPSE ETF scheme/index.

The first tranche of CPSE ETF was managed by Goldman Sachs MF, which was then acquired by RNAM in October 2015. The finance ministry later gave nod for transfer of management of CPSE ETF to RNAM.

After closing of the FFO, the units will be listed on the stock exchanges in the form of an ETF tracking the Nifty CPSE Index.