Centre likely to reach divestment target with CPSE exchange-traded-fund

Bids valued about Rs 1,800 cr that include the subscription for Rs 850 cr out of Rs 900 cr reserved for anchor investors were received by the company till yesterday

Riding on a good investor response being generated for the Rs 3,000-crore CPSE Exchange Traded Fund (ETF), the Government of India is expected achieve the revised disinvestment target of Rs 16,000 crore with the closure of the new fund offer tomorrow.

"Response from retail investors has been very good as is evident from the number of calls we are receiving every day," Vijesh Gonsalves, executive director, Goldman Sachs, the fund manager of the first of its kind government-backed ETF involving the equity shares of ten PSUs, said here today.

Bids valued about Rs 1,800 crore that include the subscription for Rs 850 crore out of Rs 900 crore reserved for anchor investors were received by the company till yesterday, he said.

The disinvestment target for 2013-14 was scaled down from the original Rs 30,000 crore by the government as the stake sale plan with regard to some of the PSUs did not go as planned, according to Sangita Choure, joint secretary, Department of Disinvestment, Ministry of Finance. The government has so far undertaken two follow-on public offers (FPOs), six offers for sale (OFS) one buy-back offer besides the present ETF to achieve the disinvestment targets during the current year. These offers were also made partly in compliance with the public shareholding norms, she said on the sidelines of a road show organised in connection with the CPSE ETF.

While the government keeps all these routes open for future disinvestment plans, OFS was found to be a much easier and quicker mode, according to her. Responding to a question on the candidates for future disinvestment plans, she said it all depends up on the policy of the next government.

Admitting that the shares of some of the companies that were included in the ETF have not been performing well, Gonsalves, however, said a strong government expected after the elections will benefit the public sector in a big way.