Bharat-22 ETF: Anchor investors put in Rs 13,500-cr bids, subscription soars 27 times

The fourth tranche of Bharat-22 exchange traded fund received an overwhelming response from institutional players on Thursday with the portion reserved for anchor investors garnering bids worth Rs 13,500 crore, around 27 times of the size.

The ETF issue that opened on Thursday received subscriptions from investors like mutual funds, foreign portfolio investors, and insurance funds.

The follow-on fund offer will open for subscription for retail and other institutional investors on Friday. The investors would get a 3 per cent discount over the issue price.

ICICI Prudential Mutual Fund is managing the Bharat-22 ETF's fund offer, through which the government aims to raise an initial amount of Rs 2,000 crore with a green-shoe option to retain over-subscription.

The government has not taken a final call on the amount that will be retained from the over-subscription but sources privy to the development said that the government may retain an over-subscription of Rs 6,000 crore, which will take the total size to Rs 8,000 crore.

As much as 25 per cent of the issue size, or Rs 500 crore was reserved for anchor investors who put in bids worth about Rs 13,569 crore. This translates into 27 times over the initial amount allocated to this category, ICICI Prudential MF said in a statement.

"We are happy to see the continued support received from anchor investors towards the FFO 2 of Bharat-22 ETF. Now, we look forward to active participation from non-anchor investor category tomorrow, whereby one has the opportunity to own some of the jewels of corporate India at a discounted price," said Nimesh Shah, MD and CEO, at ICICI Prudential MF.

The decision to come out with another tranche of the ETF has been taken after receiving robust response for earlier stake sale by the government in the product.

The government has so far raised around Rs 35,900 crore through Bharat-22 ETF -- Rs 14,500 crore was garnered in November 2017, another Rs 8,400 crore was mopped up in June 2018 and Rs 13,000 crore in February this year.

Proceeds from the ETF will help the government meet its disinvestment target of Rs 1.05 lakh crore for the current financial year.

The central public sector enterprises that are part of the Bharat-22 ETF include ONGC, IOC, SBI, BPCL, Coal India and Nalco.

Bharat Electronics, Engineers India, NBCC, NTPC, NHPC, SJVNL, GAIL, PGCIL, NLC India, Axis Bank, ITC and L&T are the other constituents.

Only three public sector banks -- SBI, Indian Bank and Bank of Baroda -- figure in the Bharat-22 index.