Fourth Tranche Of Bharat-22 ETF To Launch On Oct. 3, Aims To Raise Rs 8,000 Crore
The portrait of Mahatma Gandhi is displayed on Indian rupee banknotes in an arranged photograph. (Photographer: Brent Lewin/Bloomberg)  

Fourth Tranche Of Bharat-22 ETF To Launch On Oct. 3, Aims To Raise Rs 8,000 Crore


The government will launch the fourth tranche of Bharat-22 Exchange Traded Fund on Oct. 3 and expects to garner up to Rs 8,000 crore from selling CPSE shares in the offering, people in the know said Friday.

The Bharat-22 ETF will open for anchor investors on Oct. 3 and for other institutional and retail investors the next day. The investors will get a 3 percent discount over the issue price.

"The offer is likely to have a base issue size of Rs 2,000 crore, with a green-shoe option to retain another Rs 6,000 crore, taking the total amount to Rs 8,000 crore," one of the persons cited above said.

The decision has been taken after receiving robust response for earlier stake sales by the government in the product.

The government has raised around Rs 35,900 crore in three tranches of the Bharat-22 ETF—Rs 14,500 crore in November 2017, Rs 8,400 crore in June 2018 and Rs 13,000 crore in February 2019.

Proceeds from the ETF will help the government meet its disinvestment target of Rs 1.05 lakh crore for the current financial year.

The Central Public Sector Enterprises, or CPSEs, that are part of the Bharat-22 ETF include Oil and Natural Gas Corporation Ltd., Indian Oil Corporation Ltd., State Bank of India, Bharat Petroleum Corporation Ltd., Coal India Ltd. and National Aluminium Company Ltd.

Other constituents are Bharat Electronics Ltd., Engineers India Ltd., NBCC (India) Ltd., NTPC Ltd., NHPC Ltd., SJVN Ltd., GAIL (India) Ltd., Power Grid Corporation of India Ltd., NLC India Ltd., Axis Bank Ltd., ITC Ltd. and Larsen & Toubro Ltd. Only three public sector banks—SBI, Indian Bank and Bank of Baroda—figure in the Bharat-22 index.

Earlier this month, ICICI Prudential Mutual Fund, which manages the ETF, had filed the draft papers regarding the issue with the capital markets regulator.

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