Govt to list Bharat-22 ETF on overseas exchange to raise raise capital

The government has already raised Rs 229.00 billion through two tranches of Bharat-22 ETF in the domestic markets

The government is planning to list Bharat-22 ETF on an overseas stock exchange to unlock its value and raise foreign capital.

The government has already raised Rs 229.00 billion through two tranches of Bharat-22 Exchange Traded Fund (ETF) in the domestic markets.

There have been some initial discussions on whether Bharat-22 ETF can tap the overseas markets, an official told PTI.

After the government decides on an overseas listing, the investment bankers would assess investor demand and a final call would then be taken on which stock exchange the ETF is to be listed, the official said.

Launched in 2017-18 fiscal, the Bharat 22 ETF, consist of 16 central public sector enterprises (CPSEs), three PSU banks and three private sector companies ITC, L&T and Axis Bank where Specified Undertaking of Unit Trust of India (SUUTI) holds stake.

Bharat-22 ETF basket is diversified and there should be investor demand in overseas market, the official added.

The state-owned companies or PSUs that are part of the new Bharat ETF-22 include ONGC, IOC, SBI, BPCL, Coal India and Nalco.

The other central public sector enterprises on the list are Bharat Electronics, Engineers India, NBCC, NTPC, NHPC, SJVNL, GAIL, PGCIL and NLC India. Only three public sector banks -- SBI, Indian Bank and Bank of Baroda -- figure in the Bharat-22 index.

The official said the ETF route is a safer mode of disinvestment as it shields investors against stock market volatility.

Currently, Indian companies can list abroad through American Depository Receipts or Global Depository Receipts.

Through the first tranche of Bharat-22 ETF the government had raised Rs 145 billion in November 2017. While, through the second tranche in June 2018, it mopped up Rs 84.00 billion.

In the current fiscal, the government has set a target of Rs 800 billion to be raised through PSU disinvestment, as against Rs 1.03 trillion raised in 2017-18 fiscal.