Arun Jaitley, India’s finance minister, center, and other members of the finance ministry leaving the North Block before the Budget presentation in Parliament. (Photographer: Udit Kulshrestha/Bloomberg)

Centre Will Sell Stakes In 22 Firms Through New Exchange Traded Fund

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The government on Friday announced the formation of a new Exchange Traded Fund, Bharat 22, comprising its holding in SUUTI, the Central Public Sector Enterprise (CPSE) ETF and public sector banks, with an eye on meeting its divestment target.

The ETF will comprise of 22 stocks from six sectors, including banking, energy, fast moving consumer goods and industrials, among others, Finance Minister Arun Jaitley said.

Among the constituents of the ETF, Larsen & Toubro Ltd. has a maximum exposure of 17.1 percent while sectorally, industrials have the largest exposure at 22.6 percent, according to a finance ministry statement. Other companies which are part of the ETF include State Bank of India Ltd., Axis Bank Ltd., Indian Oil Corporation Ltd., Power Grid Corporation Ltd. and Coal India Ltd., among others.

The newly-formed ETF will help the government speed up the divestment process in order to attempt to meet the “steep” target set for the ongoing financial year (April-March), Jaitley said. The Centre had thus far raised close to Rs 9,300 crore during the financial year, with a target to raise Rs 72,500 crore.

The government has not taken a call on the timeline for launch of Bharat 22 ETF, Jaitley said, while also not offering details on the quantum of stake it intended to divest in each company.

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