The further fund offer (FFO) of Central Public Sector Enterprise (CPSE) ETF has received an overwhelming response from investors. In fact, the fund house has received over 1.20 lakh application amounting to Rs.9,500 crore in its second FFO.
The government is planning to raise Rs.2,500 crore from this ETF. Of this, retail would be close to Rs.1000 crore.
Investors will get a discount of 3.5% on the market price of the stock. The ETF, which also qualifies as a RGESS, comes with growth option only. It will invest a minimum of 95% of its assets in securities comprising CPSE Index and a maximum of 5% in debt securities.
This FFO is part of the Government of India’s overall disinvestment program, announced earlier by the Department of Investment and Public Asset Management (DIPAM), Ministry of Finance, using the ETF route.
In January, the fund house has mopped up Rs.6000 crore from the second tranche of CPSE ETF.
The CPSE Index constitutes of companies like ONGC, Gail India, Coal India, Rural Electrification Corporation, Indian Oil Corporation, Oil India, Power Finance Corporation, Container Corporation of India, Bharat Electronics and Engineers India. The Government of India holds a majority stake in these companies.