Finance Ministry Starts Consultation With Investors To Launch Global ETF
The government has budgeted to collect Rs 90,000 crore through CPSE disinvestment in the current fiscal.
The Finance Ministry has started consultation with global investors for launching CPSE-scrip based Exchange-Traded Fund in overseas markets in the current fiscal, a government official said.
The Department of Investment and Public Asset Management will start developing the index for the ETF based on investors’ feedback about demand of sector-specific stocks.
“We are eyeing large overseas pension funds for investments into the overseas ETF. We will soon appoint fund managers for developing the new ETF. Global roadshows have seen good investor interest in the ETF route for investments into CPSEs (central public sector enterprises),” the official said.
The government currently has two exchange-traded funds: CPSE ETF and Bharat-22 ETF, listed on domestic exchanges. ETFs function like a mutual fund scheme and have underlying assets of government-owned companies.
Bharat-22 ETF, which was launched in 2017-18, has 16 central public sector enterprises covering six sectors, three public sector banks and three private sector companies where the government holds minority stake.
CPSE-ETF comprises shares of 11 companies: Oil & Natural Gas Corporation Ltd., Coal India Ltd., Indian Oil Corporation Ltd., Power Finance Corp Ltd., Rural Electrification Corporation Ltd., Bharat Electronics Ltd., Oil India Ltd., NTPC Ltd., NBCC (India) Ltd., NLC India Ltd. and SJVN Ltd.
The government has already raised Rs 32,900 crore through two tranches and an additional fund offer of Bharat-22 ETF, and Rs 38,000 crore in five tranches of CPSE ETF in the domestic market.
The government has budgeted to collect Rs 90,000 crore through CPSE disinvestment in the current fiscal as against Rs 85,000 crore mopped up in 2018-19.