 "CPSE ETF oversubscribed 2-times, gets bids worth Rs 12,000 cr")
The second tranche sale of government's exchange traded fund (ETF) of top 10 state-owned companies saw bids worth Rs 12,000 crore from investors, which is twice the amount sought to be raised.
The Reliance Mutual Fund-managed Central Public Sector Enterprises - Exchange Traded Fund (CPSE ETF) saw all round participation from investors, with retail buyers who were offered a 5 per cent discount, putting in bids for over Rs 1,000 crore.
Anchor investors, for whom the bids had opened on January 17 and Rs 1,800 crore was reserved, had put in bids for over Rs 6,000 crore.
Another Rs 6,000 crore worth bids poured in from Qualified institutional buyers and retail investors between January 18-20.
"It has been a very successful ETF and showed attractive response across the board including from FIIs, financial institutions, anchor and retail investors," Department of Investment and Public Asset Management (DIPAM) Secretary Neeraj Gupta said, after the close of the bids today.
The Further Fund Offer (FFO) of CPSE ETF had a size of Rs 4,500 crore, with an option to retain another Rs 1,500 crore in case of over-subscription.
With the success of ETF, the government is likely to have garnered Rs 6,000 crore more to this fiscal's disinvestment kitty. This would be the single biggest disinvestment proceed this fiscal.
Nomura, Morgan Stanley, SBI, LIC, Axis Bank and Birla MF are some of the anchor investors which had placed bids.
The CPSE ETF is part of government's disinvestment plan aimed at narrowing Asia's widest fiscal deficit without reducing public spending.
"From a mutual fund perspective, this has been the largest fund offering by any mutual fund till date... We are confident that ETF as a category will gain momentum in future," Reliance MF CEO Sundeep Sikka said.
The government has so far raised Rs 23,500 crore through disinvestment this fiscal, against the target of Rs 56,500 crore. Taking the ETF proceeds into account, the proceeds would go up to about Rs 30,000 crore.
CPSE ETF was launched in March 2014 by Goldman Sachs Asset Management India. In the inaugural issue, it raised Rs 4,300 crore against a target of Rs 3,000 crore.
Reliance Mutual Fund operates the fund now after it bought Goldman's mutual fund business in the country in 2015.
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The second tranche of the CPSE ETF received applications from over 2 lakh investors across 300 cities across India.
"This was the largest Disinvestment Program undertaken by the Government of India using ETF and largest fund offering by any Mutual Fund in India till date," a finance ministry statement said.
Morgan Stanley, Nomura, Kotak MF, EPFO, SBI Bank, LIC amongst prominent domestic and foreign Institutions that participated as anchor investors.
Non-Anchor portion received bids of Rs 6,000 crore -- two times of Rs 3,000 crore reserved in the issue. Non-anchor portion was largely subscribed by retail investors and pension funds - both domestic and foreign.
"Retail Investors will get First Preference and assured allotment as part of the CPSE ETF FFO norms," the statement added.
