Govt targets ~10K cr from 7th tranche of CPSE ETF

The government is planning to raise over ~10,000 crore from CPSE ETF ’s seventh tranche, which will be launched by the end of the current month, according to market sources.

The issue is likely to open for anchor investors on January 30 and for other institutional and retail investors the next day, they added.

Central Public Sector Enterprises ETF runs a concentrated portfolio with a handful of stocks having weights of as high as 20 per cent on the underlying index. The portfolio is concentrated towards the energy and oil sector.

Nippon Life India Asset Management, formerly known as Reliance Nippon Life Asset Management, is managing the CPSE ETF on the government's behalf and has already filed ‘ scheme information document’ for CPSE ETF FFO 6 with markets regulator Sebi.

Sources privy to the development said the offer will have a base issue size of ~10,000 crore. Besides, there will be a greenshoe option.

The decision to launch seventh tranche of CPSE

Exchange Traded Fund (ETF) has been taken after receiving robust response for earlier stake sale by the government in the product.

Through the earlier six tranches of the CPSE ETF, the government has already raised ~49,500 crore — ~3,000 crore from the first tranche in March 2014, ~6,000 crore in

January 2017, ~2,500 crore from the third in March 2017, ~17,000 crore in November 2018 and ~10,000 crore in March 2019 and ~11,500 crore in July 2019.

The proceeds from the ETF will help the government meet its disinvestment target of ~1.05 trillion for the current financial year.