Bharat-22 ETF’s 4th tranche to open on Thursday; govt expects to raise Rs 8,000 cr

Proceeds from the ETF will help the government meet its disinvestment target of Rs 1.05 lakh crore for the current financial year.

The government will launch the fourth installment of Bharat-22 Exchange Traded Fund (ETF) on Thursday, which is expected to help the exchequer garner up to Rs 8,000 crore from investors. The issue will open for 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 per cent discount over the issue price. “The offer is likely to have a base issue size of Rs 2,000 crore, with a greenshoe option to retain another Rs 6,000 crore, taking the total amount to Rs 8,000 crore,” a source privy to the development said. 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 Rs 35,900 crore through Bharat-22 ETF — Rs 14,500 crore was garnered in November 2017, another Rs 8,400 crore was mopped up in June 2018 and Rs 13,000 crore in February this year. Proceeds from the ETF will help the government meet its disinvestment target of Rs 1.05 lakh crore for the current financial year.

The central public sector enterprises that are part of the Bharat-22 ETF include ONGC, IOC, SBI, BPCL, Coal India and Nalco. Bharat Electronics, Engineers India, NBCC, NTPC, NHPC, SJVNL, GAIL, PGCIL, NLC India, Axis Bank, ITC and L&T are the other constituents.
Only three public sector 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 issue with capital markets regulator Sebi in September.