Bharat 22 ETF's new fund offer (NFO) received subscriptions worth Rs12,000 crore for Rs2,000 crore-worth of shares reserved for anchor investors, ICICI Prudential Mutual Fund says
New Delhi: Bharat 22 exchange-traded fund (ETF), comprising 22 companies, on Tuesday attracted robust bids with the portion reserved for anchor investors getting subscribed six times to the tune of ₹ 12,000 crore on the opening day.
ICICI Prudential Mutual Fund managed Bharat 22 ETF’s new fund offer (NFO) has size of over Rs8,000 crore. As much as 25% of total issue size, or Rs2,000 crore, was reserved for anchor investors who put in bids worth about Rs12,000 crore, ICICI Prudential MF said.
The NFO received subscriptions from across the board including mutual funds, foreign portfolio investors, insurance and retirement funds. LIC, Bank of India, SBI Pension Fund, EPFO and HDFC Ergo Insurance among others have put in bids. The issue will open for subscription for retail investors on Wednesday and will remain open till 17 November.
This Index is a unique blend of shares of key central public sector enterprises (CPSEs), public sector banks (PSBs) and also the government owned shares in blue chip private companies like Larsen & Tubro (L&T), Axis Bank and ITC. “The units of the scheme will be allotted 25 per cent to each category of investors. In this ETF, the Retirement Fund has been made separate category of investors," a finance ministry statement said.
In case of spill-over, additional portion will be allocated giving preference to retail and retirement funds, it said, adding, there is a 3% discount across the board. The shares of the government companies represent six crore sectors of the economy — finance, industry, energy, utilities, fast moving consumer goods (FMCG) and basic materials making the index broad-based and diversified.
The ETF will help the government meet its ambitious Rs72,500 crore disinvestment target for the current fiscal. “We are delighted to see the overwhelming response received from anchor investors and aiding the Government of India’s disinvestment programme. Over the next three days, we look forward to active participation from Non Anchor Investor category who have the opportunity to participate in the India growth story, at a discounted price, through this attractive long term investment opportunity," ICICI Prudential Mutual Fund managing director and chief executive officer (CEO) Nimesh Shah said in a statement.
The state-owned companies or PSUs that are part of the new ETF are ONGC, IOC, SBI, BPCL, Coal India and Nalco. The other central public sector entities on the list are Bharat Electronics, Engineers India, NBCC, NTPC, NHPC, SJVNL, GAIL, PGCIL and NLC India.
Only three public sector banks — SBI, Indian Bank and Bank of Baroda — figure in the Bharat-22 index. On Monday, Anuradha Thakur, joint secretary at the department of investment and public asset management (DIPAM), had said that the initial issue size for the ETF is Rs8,000 crore but government can also consider going beyond looking at the response.
“The BHARAT 22 ETF is an excellent avenue for investors to participate in some of the best companies with high future grown potential. The ETF is well diversified with investments across six core sectors and offers good prospects for investors," said Neeraj Kumar Gupta, secretary, DIPAM.
The government had raised about Rs8,500 crore through the two tranches of CPSE ETF last fiscal. It had first launched ETF in March 2014 and had garnered Rs3,000 crore. The first CPSE ETF consisted of scrips of 10 PSUs — ONGC, Coal India, IOC, GAIL (India), Oil India, PFC, Bharat Electronics, REC, Engineers India and Container Corporation of India.