Indian two thousand and five hundred rupee banknotes are arranged for a photograph in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Bharat-22 ETF: Anchor Investors Put In Rs 5,163 Crore Bids, Subscribe 3.44 Times

The second tranche of Bharat-22 exchange-traded fund follow-on offer was lapped up by institutional investors today. The portion reserved for anchor bidders was subscribed 3.44 times to the tune of Rs 5,163 crore.

The government today launched the follow-on fund offer of Bharat-22 ETF, comprising shares of 22 companies, to raise up to Rs 8,400 crore from the market.

The issue opened for anchor investors today, and received subscriptions from investors including mutual funds, houses, foreign portfolio investors, insurance and retirement funds. The follow-on fund offer will open for subscription for retail and other institutional investors tomorrow and will remain open till June 22.

ICICI Prudential Mutual Fund managed Bharat-22 ETF’s fund offer, through which the government aims to mop up Rs 6,000 crore with a green shoe option of raising another Rs 2,400 crore. As much as 25 percent of total issue size, or Rs 1,500 crore, was reserved for anchor investors who put in bids worth about Rs 5,163 crore, ICICI Prudential Asset Management Company said.

“We are happy to see the continued support received from anchor investors towards the FFO,” ICICI Prudential AMC’s Managing Director and Chief Executive Officer Nimesh Shah said. “We look forward to active participation from non-anchor investor category, over the next three days, whereby one has the opportunity to own some of the jewels of Corporate India at a discounted price.”

The government had in November last year launched Bharat-22 ETF comprising shares of 22 companies, including PSUs, public sector banks, ITC Ltd., Axis Bank Ltd. and Larsen & Toubro Ltd.

The fund had garnered bids to the tune of Rs 32,000 crore, although the government retained only Rs 14,500 crore.

The state-owned companies that are part of the new Bharat ETF-22 include Oil & Natural Gas Corporation Ltd., Indian Oil Corporation Ltd., the State Bank of India, Bharat Petroleum Corporation Ltd., Coal India and National Aluminium Company Ltd.

The other central public sector enterprises on the list 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. and NLC India Ltd.. Only three public sector banks — the SBI, Indian Bank and Bank of Baroda — feature in the Bharat-22 index.

The government plans to raise Rs 80,000 crore in the current fiscal from disinvestment, lower than over Rs 1 lakh crore raised last year.

Besides, the government will launch the initial public offering of railway consultancy firm RITES tomorrow through which it will divest 12 percent stake. The IPO is expected to fetch over Rs 460 crore to the exchequer.

Prior to the launch of Bharat-22 ETF, which has a diversified portfolio, the government had floated the CPSE ETF comprising stocks of 10 bluechip PSUs — ONGC, Coal India, IOC Ltd., GAIL (India), Oil India Ltd., Power Finance Corporation Ltd., Bharat Electronics Ltd., Rural Electrification Corporation Ltd., Engineers India Ltd. and Container Corporation of India Ltd..

Through the Central Public Sector Enterprise ETF, the government had raised Rs 11,500 crore in three tranches — Rs 3,000 crore from the first tranche in March 2014, Rs 6,000 crore from the second tranche in January 2017 and Rs 2,500 crore from the third tranche in March 2017.