Disinvestment Programme to Get Retail Push
NEW DELHI: In order to achieve the mammoth disinvestment target of Rs 69,500 crore set for this fiscal, the Finance Ministry is likely to revamp the CPSE ETF (Exchange Traded Fund) with opening a window of investment for EPFO and NPS along with retail investors.
Taking a cue from the earlier CPSE ETF, which invested in a pool of 10 public sector stocks, the government raised around Rs 3,000 crore in FY14.
“We plan to launch a new fund offer before Diwali. However, the composition of the stocks in CPSE ETF would remain the same. We are trying to push the government’s agenda of increasing retail participation in its disinvestment programme,” a senior Finance Ministry official said.
The units of this ETF, managed by Goldman Sachs, saw capital appreciation of 40 per cent in the first year after debuting on March 28, 2014, giving a positive narrative to the Finance Ministry to push for more ETFs.
ETF is seen as a safer bet to invest in equities compared to individual stocks which are vulnerable to fluctuations in the market as it replicates the composite index. “We have enough time to plan for our disinvestment programme this year since we started early. Hence, we can create more ETFs this year,” the official said. The government recently disinvest 5% stake in REC.
“The Cabinet had approved transferring of 3 per cent of the government holding in the 10 companies to ETF. So far we have transferred 1 per cent. We are looking at the modalities to take it up to 3 per cent,” the official added.
The Employees' Provident Fund Organisation (EPFO) has a corpus of about Rs 6.5 lakh crore with an average annual deposit of Rs 80,000 crore. Besides, the corpus of National Pension System (NPS) is also invested in equities. The total assets managed under NPS are about Rs 82,000 crore. “The Government is likely to take approvals from the market regulator Sebi,” the official said.