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Business News/ Market / Stock-market-news/  FIIs, institutions put in bids of Rs6,000 crore for CPSE ETF
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FIIs, institutions put in bids of Rs6,000 crore for CPSE ETF

Second tranche of the ETF based on stocks of CPSEs subscribed at least four times by anchor investors

Nomura, Morgan Stanley, SBI, LIC, Axis Bank and Birla MF are some of the anchor investors which placed bids. Photo: Indranil Bhoumik/MintPremium
Nomura, Morgan Stanley, SBI, LIC, Axis Bank and Birla MF are some of the anchor investors which placed bids. Photo: Indranil Bhoumik/Mint

Mumbai: The second tranche of the exchange traded fund (ETF) based on stocks of central public sector enterprises (CPSEs) was subscribed at least four times by anchor investors on Tuesday.

The CPSE ETF, managed by Reliance Nippon Life Asset Management Ltd, received subscriptions worth Rs6,000 crore from anchor investors against Rs1,500 crore reserved for such investors, according to a statement by Reliance Mutual Fund.

The second tranche of CPSE ETF was announced on 11 January to raise as much as Rs6,000 crore through the sale of government stakes in the top 10 listed CPSEs.

Also Read: EPFO decides to invest Rs2,800 crore in CPSE ETF

The sale was open only to anchor investors on Tuesday. Retail investors will be allowed to invest in the fund from 18 January to 20 January.

The underlying portfolio of the CPSE ETF will have companies including ONGC Ltd, Coal India Ltd, Indian Oil Corp. Ltd, Gail (India) Ltd, Power Finance Corp. Ltd, Rural Electrification Corp. Ltd, Container Corp.of India Ltd, Bharat Electronics Ltd, Oil India Ltd and Engineers India Ltd.

Reliance Mutual Fund said the anchor investors who participated in the offer included institutional investors such as Nomura, Morgan Stanley, State Bank of India, Life Insurance Corp. of India, Axis Bank Ltd. and Birla Mutual Fund.

Also Read: Modi-backed ETF hooks investors as fund beats India stock gauge

The issue has a base size of Rs4,500 crore with an option to retain oversubscription of up to Rs1,500 crore.

Under the scheme, all investors in the ETF will get a 5% upfront discount on the underlying stock and will be charged an expense ratio of 6.5 basis points (bps), which is one of the lowest in the mutual funds industry.

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ABOUT THE AUTHOR
Anirudh Laskar
Anirudh reports on significant corporate matters including large mergers and acquisitions, India's emerging e-commerce sector and regulatory issues in the corporate and financial services industry. Over the past 17 years, he has covered many beats including banking, NBFCs, aviation, automobile, insurance, markets, SEBI, IRDAI, mutual funds, investment banking, private equity, deals, and conglomerates.
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Published: 18 Jan 2017, 12:59 AM IST
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