MUMBAI: The government tasted its biggest success in its disinvestment plans this financial year, with a whopping Rs 17,000 crore raised through the CPSE-ETF’s third follow on offer (FFO3) that closed for public subscription on Friday. The 70 per cent portion reserved for retail and high net worth categories collected Rs 13,840 crore.
At the end of the day, the CPSE-ETF issue was oversubscribed 3.5 times with a total amount of Rs 27,300. Over 1.25 lakh applications were received till 5 pm on Friday, said Reliance Mutual Fund, which manages the ETF. With the addition of physical application forms that were still in progress till late evening, sources said, the total collection might top Rs 30,000 crore.
Government had targeted Rs 8,000 crore from this issue and initially planned to retain an oversubscription up to Rs 14,000. After the first day, the issue that was exclusively open for the anchor investors seeing an overwhelming response netting Rs 13,300 crore, a 5.57 times oversubscription, the total issue size target seems to have been raised.
“The Rs 17,000 crore raised from disinvestment is also the largest ever equity fund offering through ETFs in India … We have seen an overwhelming participation from FIIs, retirement and pension funds and domestic institutions,” said Sundeep Sikka, ED & CEO of Reliance Mutual Fund.
There was a 4.5 per cent discount to the market price of the CPSE-ETF that had 11 stocks under its index currently. Four new companies — NTPC, NLC, SJVN and NBCC — from power and construction sectors were added and three companies — GAIL, Container Corporation and Engineers India — were excluded. Other stocks in the basket include Oil and Natural Gas Corporation, Coal India, Indian Oil Corporation, Oil India, Power Finance Corporation, Rural Electrification Corporation and Bharat Electronics.
The government had, prior to this issue, raised over Rs 15,287 crore this year, which include public issues of RITES, IRCON, Midhani and Garden Reach Shipbuilders, and offer for sale from Coal India. Market volatility also made government change track to use buybacks to garner disinvestment proceeds.