India launches exchange-traded fund for asset sales

By Manoj Kumar

NEW DELHI (Reuters) - India has set up a new exchange-traded fund to sell government stakes in 22 state-run and private firms under its $11.4 billion asset sale programme, Finance Minister Arun Jaitley told reporters on Friday.

Jaitley has budgeted to raise 725 billion Indian rupees ($11.39 billion) through the asset sale programme in the fiscal year to end-March 2018.

The fund will trade government shares in four state-run energy companies - ONGC Ltd., BPCL, IOC and Coal India, he said.

It will also include banking and finance companies such as SBI, Bank of Baroda, Indian Bank, Rural Electrification Corp. Ltd., Power Finance Corp. Ltd. and Axis Bank .

New Delhi will sell shares, via the fund, in utilities like Power Grid Corp., NTPC, Gail, NHPC, NLC and SJVN.

Industrials included in the fund are: Bharat Electronics, Engineers India and NBCC.

The fund will sell government shares in ITC Ltd. and National Aluminium Co. Ltd. as well, Jaitley said.

ICICI Prudential will manage the fund, he added.

In the first four months of the 2017/18 financial year, the government has, thus far, raised 93 billion rupees($1.46 billion) through the asset sale programme, he said.

India raised 85 billion rupees $1.34 billion)through a similar fund as part of its 2016-17 asset sales programme.

Exchange Traded Funds (ETFs) are essentially Index Funds that are listed and traded on exchanges like stocks. An ETF is a basket of stocks that reflects the composition of an Index.

($1 = 63.6250 Indian rupees)

(Writing by Rajesh Kumar Singh.; Editing by Sanjeev Miglani and Jane Merriman)