DIPAM to hire legal advisors for 2nd CPSE ETF

The Finance Ministry has invited bids from law firms to advise it on the second CPSE exchange traded fund (ETF) consisting of PSU shares with a corpus of about Rs 6,000 crore.
The ETF will comprise shareholding of government in listed PSUs as well as stake in companies held through SUUTI.
The Department of Investment and Public Asset Management (DIPAM) has set the ball rolling for the second ETF and has invited bids from "domestic law firms with international consortium to act as legal adviser to assist and advise the government".
The proposals are to be submitted by January 18.

Earlier in September, DIPAM had appointed ICICI Prudential Mutual Fund for creation and launch of a new ETF, which is estimated to have a corpus of Rs 6,000 crore in the first year and may go up in coming years. The mandate for managing the fund is being given for three years.
With the appointment of legal adviser, the DIPAM will go ahead with a new fund offer (NFO) of the proposed ETF which may happen in the current fiscal ending March.

The government had launched in March 2014 the first ever Central Public Sector Enterprises or CPSE ETF, comprising scrips of 10 PSUs, which had garnered Rs 3,000 crore for the exchequer.

"The proposed new ETF will serve as an additional mechanism for the government to monetise its shareholdings in listed CPSEs and other corporate entities that will eventually form part of the new ETF basket," DIPAM added.
Government has set disinvestment target at Rs 56,500 crore for 2016-17. Of this, Rs 36,000 crore is to come from minority stake sale in PSUs and Rs 20,500 crore from strategic sale.
In this fiscal so far, the government has raised over Rs 23,000 crore from minority and strategic stake sales.