‘DeMo Cash can Flow into Mar­kets’

DIPAM secy Neeraj Gupta says more in­vestor-friendly prod­ucts needed

The Economic Times - - Budget: Day After - Dheeraj.Ti­wari @times­group.com

New Delhi: The large amount of cash that has come back into bank ac­counts fol­low­ing the gov­ern­ment’s de­mon­eti­sa­tion drive will look for av­enues of in­vest­ment and deepen the cap­i­tal mar­kets if more in­vestor friendly prod­ucts are avail­able, said Depart­ment of In­vest­ment and Pub­lic As­set Man­age­ment (DIPAM) sec­re­tary Neeraj Gupta. For the next fis­cal, the gov­ern­ment has set a mam­moth dis­in­vest­ment tar­get of ₹ 72,500 crore, of which ₹ 46,500 crore is pro­jected to come from reg­u­lar stake sales in­clud­ing an ex­change traded fund (ETF). The DIPAM sec­re­tary said that there is a great in­ter­est among re­tail in­vestors, which is vis­i­ble from the par­tic­i­pa­tion in the CPSE-ETF. “Re­tail in­vestors cor­nered 41% of the is­sue size and more than 2.7 lakh in­vestors had ap­plied, which shows there is an ap­petite for good gov­ern­ment prod­ucts,” he said. Ac­knowl­edg­ing that the new ETF pro­posed in the bud­get has to of­fer some­thing fresh, Gupta said that the new ETF will be con­structed by lever­ag­ing the strength of cen­tral pub­lic sec­tor en­ter­prises and other gov­ern­ment hold­ings. The gov­ern­ment has ex­panded the role of its dis­in­vest­ment strat­egy, which has now be­come more of in­vest­ment man­age­ment, Gupta said, not­ing that the trans­ac­tion pat­tern in dis­in­vest­ment has un­der­gone a trans­for­ma­tion.

“We have ex­plored var­i­ous pos­si­ble options in­clud­ing buy­back, bulk deals and ETF,” he said.


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