FIIs, Institutions Put In Bids Of Rs 6,000 Crore For Second Tranche Of CPSE ETF
Portion reserved for anchor investors gets subscribed over three-fold.
The second tranche sale of government's exchange traded fund (ETF) of top 10 state-owned companies on Tuesday attracted robust response with the portion reserved for anchor investors getting subscribed over three-fold to the tune of Rs 6,000 crore on the opening day.
The Reliance Mutual Fund-managed Central Public Sector Enterprises Exchange Traded Fund (CPSE ETF) has a Further Fund Offer (FFO) size of Rs 4,500 crore, with an option to retain another Rs 1,500 crore in case of over-subscription. As much as 30 percent of total issue size, or Rs 1,800 crore, was reserved for anchor investors who put in bids worth about Rs 6,000 crore today, a top official said on the condition of anonymity.
Nomura, Morgan Stanley, SBI, LIC, Axis Bank and Birla MF are some of the anchor investors which placed bids. The issue received all round participation from all categories of investors – banks, insurance companies, FIIs and MFs – both domestic and foreign.
The government is looking to raise a total Rs 6,000 crore in the second tranche issue of the CPSE ETF, which is part of its disinvestment plan aimed at narrowing Asia's widest fiscal deficit without reducing public spending. This would be the single biggest disinvestment proceed this fiscal.
The issue will open for subscription for retail investors and qualified institutional buyers on Wednesday and will remain open till January 20. Retail investors will get 5 percent discount, the official said. The government has raised Rs 23,500 crore through disinvestment this fiscal so far against the target of Rs 56,500 crore.
CPSE ETF was launched in March 2014 by Goldman Sachs Asset Management India. In the inaugural issue, it raised Rs 4,300 crore against a target of Rs 3,000 crore. Reliance Mutual Fund operates the fund now after it bought Goldman's mutual fund business in the country in 2015.
"We are happy to be working with the government on its disinvestment programme. We are overwhelmed by the response received from investors across all categories today. The issue saw very strong participation from the private sector, in addition to government participation, on the first day itself and we are hopeful of strong momentum in the retail category that opens tomorrow (Wednesday)," Reliance Mutual Fund CEO Sundeep Sikka said.