Centre plans to raise Rs 10,000 cr from CPSE ETF's seventh tranche: Report

The government is planning to raise over Rs 10,000 crore from CPSE ETF's seventh tranche that would be launched by the end of the current month, according to market sources.

The issue is likely to open for anchor investors on January 30 and for other institutional and retail investors, the next day, they added.

Central Public Sector Enterprises ETF runs a concentrated portfolio with a handful of stocks having weights of as high as 20 per cent on the underlying index. The portfolio is concentrated towards the energy and oil sector.

Nippon Life India Asset Management, formerly known as Reliance Nippon Life Asset Management, is managing the CPSE ETF on the government's behalf and has already filed 'scheme information document' for CPSE ETF FFO 6 with markets regulator Sebi.

Sources privy to the development said the offer will have a base issue size of Rs 10,000 crore. Besides, there will be a green-shoe option.

The decision to launch seventh tranche of CPSE Exchange Traded Fund (ETF) has been taken after receiving robust response for earlier stake sale by the government in the product.

Through the earlier six tranches of the CPSE ETF, the government has already raised Rs 49,500 crore -- 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, Rs 17,000 crore in November 2018 and Rs 10,000 crore in March 2019 and Rs 11,500 crore in July 2019.

The CPSE ETF tracks shares of 11 CPSEs -- ONGC, NTPC, Coal India, IOC, REC, PFC, Bharat Electronics, Oil India, NBCC India, NLC India and SJVN.

The proceeds from the ETF will help the government meet its disinvestment target of Rs 1.05 trillion for the current financial year. It had aimed to garner Rs 85,000 crore through disinvestment in the preceding financial year.