The government will next month launch the ‘Bharat 22’ Exchange Traded Fund (ETF), managed by ICICI Prudential Mutual Fund, to garner about Rs. 8,000 crore.
The new fund offer (NFO) will open for anchor investors on November 14, while subscription for retail investors would begin from November 15 and continue till November 17, ICICI Prudential MF said in a statement.
An upfront discount of 3 per cent would be offered to all category of investors.
Bharat-22 comprises 22 scrips of public sector units, banks and entities in which the government holds a minority stake.
“The Bharat 22 ETF is an excellent avenue for investors to participate in some of the best companies with high future growth potential.
“The ETF is well diversified with investments across six core sectors — basic materials, energy, finance, FMCG, industrial and utilities. It offers good opportunity and prospects for investors and we are confident of an overwhelming response to this NFO,” said Neeraj Kumar Gupta, Secretary, Department of Investment and Public Asset Management (DIPAM).
The state-owned companies or PSUs that are part of the new ETF are ONGC, IOC, SBI, BPCL, Coal India and Nalco.
It also includes government’s strategic holding in Axis Bank, ITC and L&T held through SUUTI (Specified Undertaking of Unit Trust of India).
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.
The government is expected to fetch an initial amount of Rs. 8,000 crore from the Bharat 22 ETF. ICICI Prudential MF has already filed documents for the new ETF with markets regulator Sebi.
“We believe the ETF offers an attractive long term investment opportunity to partake in the India growth story by way of a diversified blend of companies spread across several sectors and are available at attractive valuations and a good subscription discount,” ICICI Prudential MF Managing Director and CEO Nimesh Shah said.
The government had raised about Rs. 8,500 crore through the three tranches of CPSE ETF last fiscal.
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.