Third tranche of CPSE ETF sees FIIs, institutions put in bids of Rs5,700 crore

The CPSE ETF issue will open for subscription for retail investors and pension funds on Wednesday and will remain open till 17 March


The government is looking to raise Rs2,500 crore from the third sale of the CPSE ETF, which is part of its disinvestment plan aimed at narrowing Asia’s widest fiscal deficit without reducing public spending. Photo: iStockphoto
The government is looking to raise Rs2,500 crore from the third sale of the CPSE ETF, which is part of its disinvestment plan aimed at narrowing Asia’s widest fiscal deficit without reducing public spending. Photo: iStockphoto

New Delhi: The third sale of government’s exchange traded fund of top 10 state-owned companies on Tuesday attracted robust bids with the portion reserved for anchor investors getting subscribed over 7.5 times to the tune of Rs5,700 crore on the opening day.

The Reliance Mutual Fund-managed Central Public Sector Enterprises – Exchange Traded Fund (CPSE ETF) has Further Fund Offer (FFO) size of Rs2,500 crore.

As much as 30% of total issue size, or Rs750 crore, was reserved for anchor investors who put in bids worth about Rs5,700 crore today, a top official said.

Foreign institutions like BNP Paribas, Morgan Stanley, SocGen, CitiGroup and domestic investors like LIC, Exide Insurance, SBI Bank, Axis Bank and Canara Bank put in bids.

The government is looking to raise Rs2,500 crore from the third sale of the CPSE ETF, which is part of its disinvestment plan aimed at narrowing Asia’s widest fiscal deficit without reducing public spending.

“While the numbers are awaited, we are delighted to see this unprecedented response and strong appetite for the CPSE ETF, especially by anchor investors.

Retail investors and PFs have also shown keen interest and we hope to see good participation from them within the next three days,” RMF ED and chief executive officer (CEO) Sundeep Sikka said.

The issue will open for subscription for retail investors and pension funds tomorrow and will remain open till 17 March.

The demand for the third tranche has been robust despite the fact that the government has given a lower discount of 3.5% than that of 5% in the second tranche, sources said.

The government had raised Rs6,000 crore in the second tranche of CPSE ETF in January and Rs3,000 crore from the first tranche in March 2014.

“The third tranche was within the limit of the approval taken at the time of launch of the ETF. A new ETF is also in the offing and as and when required the government will tap this route for fund raising,” an official said.

The government has raised about Rs33,000 crore through disinvestment this fiscal so far against the revised estimate of Rs45,500 crore.

CPSE ETF was originally managed by Goldman Sachs MF, which was acquired by Reliance MF in October 2015.

The finance ministry in September gave its nod for the transfer of management of CPSE ETF to Reliance Mutual Fund.

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