Government Set To Raise Over Rs 10,000 Crore Through CPSE ETF
The sixth tranche of further fund offer of the CPSE ETF will open on Jan. 30.
The Narendra Modi government plans to raise over Rs 10,000 crore from the Central Public Sector Enterprises Exchange Traded Fund through the sixth tranche of further fund offer that will open on Jan. 30.
The fund offer will have a base size of Rs 10,000 crore and a greenshoe option—through which it can retain any oversubscription—based on the response received, according to a mutual fund industry executive.
In an exchange notification on Jan. 17, the Index Maintenance Sub-Committee of NSE Indices Ltd. revised the eligibility criteria for companies to be included in the Nifty CPSE Index on which the ETF is based.
Accordingly, state-run firms with government holding of less than 51 percent (up from 50.5 percent earlier) would be ineligible. Subsequently, Indian Oil Corporation Ltd. and Power Finance Corporation Ltd. had to make way for Cochin Shipyard Ltd., NHPC Ltd., NMDC Ltd. and Power Grid Corporation Ltd. The changes will come into effect on Jan. 24.
Also Read: PSU Stocks React To Change In Nifty CPSE Index
Investors may get a discount of around 2.5-3 percent on the issue price, the executive said on the condition of anonymity. The CPSE ETF has shares of 13 state-run companies after the adjustment.
The government has so far this fiscal raised Rs 10,000.39 crore in divestment proceeds via the CPSE ETF route. An additional Rs 4,368.8 crore was raised through the Bharat 22 ETF. The government has so far been able to raise Rs 16,213.38 crore—against the disinvestment target of Rs 1,05,000 crore set in the annual budget in July.
Also Read: Less Than A Fifth Of Divestment Target Achieved With 3 Months To Go
Major divestments like BPCL, Container Corporation of India Ltd. and Shipping Corporation of India Ltd. are unlikely to be completed this fiscal.