The Central Public Sector Enterprises Exchange Traded Fund (CPSE ETF) this week clocked total bids worth Rs 6,072 crore from around 16 anchor investors, sources say, with the anchor book oversubscribed by 5.78 times. This is the fifth tranche of the ETF from which the government seeks to raise at least Rs 3,500 crore.
“CPSE ETF managed by Reliance Mutual Fund anchor book has been oversubscribed by 5.78 times against anchor base issue size of Rs 1,050 crore. Reliance Mutual Fund received applications worth Rs 6,072 crore and participation was seen across various foreign and domestic institutional investors,” said sources.
According to these, a portion not exceeding 30 per cent of the maximum amount to be raised shall be available for allocation to anchor investors.
The ETF tracks shares of 11 CPSEs — ONGC, NTPC, Coal India, IOC, Rural Electrication Corp, Power Finance Corp, Bharat Electronics, Oil India, NBCC India, NLC India and SJVN.
The list of anchor investors include BNP Paribas Arbitrage, Citi Group Global Markets Mauritius Pvt Ltd, Credit Suisse Singapore Ltd, Edelweiss Alpha Fund, ICICI Prudential Balanced Advantage Fund, Merrill Lynch Markets Singapore Pte Ltd, and Morgan Stanley (France) S.A., among others.
The fourth Further Fund Offer (FFO) will close on March 22 and is expected to help the government mop up enough funds to meet its disinvestment target of `80,000 crore for the current fiscal ending March 31.
Non-anchor investors, including retail investors, began putting in their bids from Wednesday.
The ongoing FFO is the second CPSE (Central Public Sector Enterprises) ETF FFO in the current fiscal after Rs 17,000 crore was raised in the previous tranche which went to the market in November 2018. So far, the government has raised a total of Rs 28,500 crore from from these CPSE ETF tranches, including the first offer in March 2014 which raised Rs 3,000 crore.
The government then garnered Rs 6,000 crore from the first FFO of the CPSE ETF in January 2017. Subsequently, Rs 2,500 crore was raised from the third tranche in March 2017.