New Delhi: The government is planning to raise about ₹ 10,000 crore through a follow on offer of Bharat 22 ETF in February, an official said. “Plans are on for launching the third tranche of Bharat 22 ETF around February. The follow on offer is likely to have a base issue size of ₹ 5,000 crore, with a green-shoe option to retain an oversubscription of equal amount, taking the total issue size to ₹ 10,000 crore," the official told the Press Trust of India.
The government has so far raised ₹ 22,900 crore through the Bharat 22 ETF. While ₹ 14,500 crore was raised in November 2017, another ₹ 8,400 crore was raised in June 2018.
The official said there would be a need to rebalance the exchange traded fund after the third tranche as the government holding in certain CPSEs in the basket could fall below 53%.
The Central Public Sector Enterprises (CPSEs) that are part of the Bharat 22 ETF include Oil and Natural Gas Corp. Ltd (ONGC), Indian Oil Corp. Ltd, State Bank of India (SBI), Bharat Petroleum Corp. Ltd (BPCL), Coal India Ltd and NALCO Ltd.
Other constituents include Bharat Electronics, Engineers India, NBCC, NTPC, NHPC, SJVNL, GAIL India, PGCIL and NLC India. Only three public sector banks—SBI, Indian Bank and Bank of Baroda—figure in the Bharat 22 index.
Also, the government’s strategic holding in Axis Bank, ITC and L&T held through SUUTI (Specified Undertaking of Unit Trust of India) has been put in the ETF basket.
Last month, the government had raised ₹ 17,300 crore through a follow on offer of another exchange traded fund—CPSE ETF, which comprises shares of 11 public sector enterprises.
As against the budgeted disinvestment target of ₹ 80,000 crore, the government has so far raised ₹ 34,000 crore by selling minority stake in CPSEs and ETFs.