Bharat 22 ETF’S 4th tranche to open today

THE GOVERNMENT EXPECTS TO RAISE ₹8,000 CRORE FROM INVESTORS IN THE FOURTH INSTALMENT OF THE BHARAT 22 ETF

NEWDELHI: The government will launch the fourth instalment of Bharat 22 Exchange Traded Fund (ETF) on Thursday, which is expected to help the exchequer garner up to ₹8,000 crore from investors.

The i s s u e wi l l o p e n f o r anchor investors on Thursday and for other institutional and retail investors, the next day, according to scheme information document filed by ICICI Prudential Mutual Fund, which manages Bharat 22 ETF.

The investors would get a 3% discount over the issue price.

“The offer is likely to have a base issue size of ₹2,000 crore, with a greenshoe option t o retain another ₹6,000 crore, taking the total amount to ₹8,000 crore,” a person with knowledge of the matter said.

A greenshoe option is an over allotment option.

The decision has been taken after receiving robust response for earlier stake sale by the government in the product.

The government has so far raised around ₹35,900 crore through Bharat 22 ETF—₹14,500 crore was garnered in November 2017, another ₹8,400 crore was mopped up in June 2018 and ₹13,000 crore in February this year.

Proceeds from the exchange traded fund will help the government meet its disinvestment target of ₹1.05 lakh crore for the current financial year.

The central public sector enterprises that are part of the Bharat-22 ETF include Oil and Natural Gas Corporat i o n (ONGC), Indian Oil Corporation (IOC), State Bank of India (SBI), Bharat Petroleum Corp. Ltd (BPCL), Coal India Ltd and National Aluminium Company Ltd (NALCO).

Bharat Electronics, Engineers I ndia, NBCC, NTPC, NHPC, SJVNL, GAIL, PGCIL, NLC India, Axis Bank, ITC Ltd and Larsen & Toubro Ltd (L&T) are the other constituents.

Only t hree public s ector banks—sbi, Indian Bank and Bank of Baroda—figure in the Bharat-22 index.

ICICI Prudential Mutual Fund had filed the draft papers regarding the i s s u e wi t h capital markets regulator Securities and Exchange Board of India (Sebi) in September.

Bharat 22 ETF invests in the 22 companies that comprise the S&P BSE Bharat 22 index—19 companies are in the public sector and three in the private sector.

The private sector companies have a 39.4% weightage in the index.

The largest sectoral allocation in the Bharat 22 index was towards industrials (22%), followed by finance (21%) and utilities (21%), as of September 4.

In terms of market capitalisation, large-caps account for about 88% of the index.