Bharat 22 ETF set to open for public subscription on November 15

NEW DELHI:   The highly awaited launch date of the government’s ‘Bharat 22’ Exchange Traded Fund (ETF) has been set for November 15. Managed by ICICI Prudential AMC, the fund is expected to raise around `8,000 crore.According to a statement released by the fund manager, the new fund offer (NFO) will open for anchor investors on November 14, while subscription for retail investors would begin from November 15 and continue till November 17. The release also stated that an upfront discount of 3 per cent would be offered to all category of investors.

The Bharat-22 ETF issue is part of the divestment strategy followed by the government to pare down, or completely divest, its stakes in select Central Public Sector Enterprises (CPSE). The ETF, as its name suggests, comprises 22 scrips of public sector units, banks and entities in which the government holds a minority stake.

“The ETF is well diversified with investments across six core sectors — basic materials, energy, finance, FMCG, industrial and utilities. It offers good opportunity and prospects for investors and we are confident of an overwhelming response to this NFO,” said Neeraj Kumar Gupta, Secretary, Department of Investment and Public Asset Management (DIPAM).

Part of the offer will be scrips from several prominent CPSEs. The state-owned companies part of the new ETF are ONGC, IOC, SBI, BPCL, Coal India and Nalco. It also includes government’s strategic holding in Axis Bank, ITC and L&T held through SUUTI (Specified Undertaking of Unit Trust of India), and other CPSEs like Bharat Electronics, Engineers India, NBCC, NTPC, NHPC, SJVNL, GAIL, PGCIL and NLC India. However, only three public sector banks — SBI, Indian Bank and Bank of Baroda — figure in the index.

“We believe the ETF offers an attractive long term investment opportunity to partake in the India growth story by way of a diversified blend of companies spread across several sectors and are available at attractive valuations and a good subscription discount,” ICICI Prudential MF Managing Director and CEO Nimesh Shah said. Initial capital raised through the ETF is expected to net the government around `8,000 crore. The government had already raised about `8,500 crore through the three tranches of CPSE ETF last fiscal — which consisted of 10 PSU scrips, including ONGC, Coal India, IOC, GAIL (India), among others.