Reliance Nippon Life announces further fund offer for CPSE ETF

Mumbai: Reliance Nippon Life Asset Management Ltd announced a further fund offer (FFO) of its Central Public Sector Enterprises (CPSE) exchange-traded fund (ETF) to raise ₹ 8,000 crore as a part of the government’s overall divestment programme. The government may raise more than the stipulated ₹ 8,000 crore, but the quantum of excess fund raising, if any, was not disclosed by the asset management company.

“It will depend. We have an internal (target). We have not disclosed publicly,” Pankaj Gupta, director, department of investment and public asset management, said, adding it has been kept open depending on the response, and the total fund raised could be around ₹ 14,000 crore.

An upfront discount of 4.5% is being offered to all investors.

The offer will open for anchor investors on 27 November and for other investors on 28-30 November.

The ETF will comprise NTPC Ltd, Coal India Ltd, Indian Oil Corp. Ltd, Oil and Natural Gas Corp. Ltd, REC Ltd, Power Finance Corp. Ltd, Bharat Electronics Ltd, Oil India Ltd, NBCC (India) Ltd, NLC India Ltd and SJVN Ltd.

CPSE ETF’s new fund offer (NFO), FFO & FFO 2 raised ₹ 3,000 crore, ₹ 6,000 crore and ₹ 2,500 crore, respectively.

Gupta was confident the government will be able to meet its divestment target of ₹ 80,000 crore for this fiscal. “Yes, definitely. We had planned it very thoroughly,” he said, adding that a majority of divestments are likely to take the buyback route while the fiscal may see one or two initial public offerings from state-run companies.

He said General Insurance Corp. of India and New India Assurance Co. were contenders for the buyback programme, and added that another fund-raising via equity ETF route is unlikely in the current fiscal.

Gupta acknowledged that a debt ETF was in the works.

“Public can also participate. (This) CPSE will be in the form of bonds,” said Gupta, adding that it will be ready by end of March, but it may not hit the market in this fiscal year.