CPSE ETF additional sale next week, govt to raise at least Rs 3,500 crore

The government is planning to launch an additional offering of CPSE ETF next week, seeking to raise at least Rs 3,500 crore, sources said.

The issue is expected to be open for subscription between March 19 and 22. The first day will be for anchor investors, while the following days (March 21 is a market holiday) will be open for subscription for public investors.

The ETF is expected to offer a discount to the investors like it has done in the past. However, the discount could not be ascertained. The government’s disinvestment proceeds have touched Rs 56,473 crore in the current fiscal year as against the full year target of Rs 80,000 crore. Around 63 per cent of the government’s disinvestment proceeds in the fiscal have come through the ETF route.

Last month, as much as Rs 10,000 crore came in from Bharat-22 ETF and another Rs 5,379 crore from the sale of Specified Undertaking of Unit Trust of India (SUUTI) stake in Axis Bank.

During the last CPSE offering in November, the government mopped up Rs 17,000 crore, the biggest disinvestment transaction through ETF.

Besides these, the government has managed to raise Rs 8,140 crore through buybacks, Rs 1,703 crore through initial public offering and Rs 5,218 crore through the offer for sale of Coal India during 2018-2019.

CPSE ETF was launched in 2014. It has so far raised Rs 28,500 crore in four tranches. It raised Rs 3,000 crore from the first tranche in March 2014; Rs 6,000 crore in January 2017; Rs 2,500 crore from the third in March 2017; and Rs 17,000 crore in November last year from the fourth tranche.

The CPSE ETF, which is managed by Reliance Nippon Life Mutual Fund, comprises shares of the 11 public sector undertaking companies, namely, ONGC, Coal India, IOC, Oil India, PFC, REC, Bharat Electronics, NTPC, SJVN, NLC and NBCC. For the next fiscal (2019-2020), the government has set disinvestment target of Rs 90,000 crore.