After successful launch of Central Public Sector Enterprises (CPSE) exchange-traded fund (ETF) in May 2014 and two subsequent follow-on offers in February and March 2017 worth roughly Rs11,500 crore, the government is divesting shares of another set of companies. It has appointed ICICI Prudential Asset Management Co. Ltd as the fund manager and the new scheme is Bharat 22 ETF (B22 ETF).
What is it?
B22 ETF will hold shares of 22 companies. Rather than divesting its stake individually, it has chosen the ETF route. The money in B22 ETF will be transferred to the government and an equivalent value of shares of these 22 companies will be transferred to the fund.
The S&P BSE Bharat 22 index has been specially created to track the basket’s performance. The index will comprise shares of the 22 companies in B22 ETF. No individual stock in the index—and thereby B22 ETF—will be more than 15% of the index and no sector more than 20%.