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Business News/ Market / Stock-market-news/  Govt seeks to hire domestic law firm as advisor for ETF launch

New Delhi: The finance ministry has sought interest from reputed domestic law firms with international consortium to act as legal advisor to assist and advise the government for creation and launch of a new exchange-traded fund (ETF).

The advertisement to this effect published in newspapers on Monday has sought proposals by 9 May.

“We will continue to use ETF as a vehicle for further disinvestment of shares. Accordingly, a new ETF with diversified CPSE stocks and other government holding will be launched in 2017-18," finance minister Arun Jaitley had said in his 1 February budget speech.

The Department of Investment and Public Asset Management (DIPAM) targets to launch the second ETF comprising shares of listed central public sector enterprises (CPSEs) and some of the stocks of the Specified Undertaking of Unit Trust of India (SUUTI) such as ITC Ltd, Larsen and Toubro Ltd (L&T) and Axis Bank Ltd.

The first CPSE ETF was launched by Goldman Sachs Asset Management India on 18 March 2014, and comprises 10 firms: Oil and Natural Gas Corp. Ltd, GAIL (India) Ltd, Coal India Ltd, Rural Electrification Corp. Ltd, Oil India Ltd, Indian Oil Corp. Ltd, Power Finance Corp. Ltd, Container Corp. of India Ltd, Bharat Electronics Ltd and Engineers India Ltd.

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

The government raised Rs46,247 crore through disinvestment in 2016-17, exceeding the downward revised target of Rs45,000 crore for the financial year, the highest amount raised through disinvestment in a fiscal year.

As much as Rs35,468 crore was raised from disinvestment of CPSEs and Rs10,779 crore came from strategic disinvestment, which was primarily the sale of holding in stocks through SUUTI.

The government has set an ambitious target of raising Rs72,000 crore in 2017-18 through disinvestment.

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Updated: 24 Apr 2017, 10:45 AM IST
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