FIIs invest ₹750 cr on final day

The Central Public Sector Enterprises Exchange Traded Fund offer, which closed on Friday, has managed to raise ₹4,000 crore. Foreign institutional investors pumped in ₹750 crore on the final day.

The CPSE ETF basket consists of shares of 10 PSUs and provides investors an opportunity to become part-owners of ONGC, GAIL, Coal India, IndianOil, Oil India, Power Finance Corp, Rural Electrification Corp, Container Corp, Engineers India and Bharat Electronics.

Earlier, anchor investors, including the State Bank of India, Life Insurance Corporation, Bharti Axa Life, General Insurance Corporation, National Insurance Company, New India Assurance and United India Insurance invested ₹835 crore.

The response to the ETF will help the Government meet its revised disinvestment target. In the interim Budget, the Government had lowered the public sector unit stake sale target from ₹40,000 crore to ₹16,027 crore.

The funds collected by the ETF from the initial offer will be given to the Government, which, in turn, will deposit shares of equal value from the 10 PSEs. The Government will divest shares worth ₹800 crore of ONGC into the ETF. The fund is managed by Goldman Sachs and will be listed.

Sanjiv Shah, CEO, Goldman Sachs Asset Management, said there was an overwhelming investor response to the fund. “Being pioneers of ETFs in India we are happy that the concept has resonated with all investors.”

The ETF offer was priced at ₹10 a unit. The Government will give one loyalty unit for every 15 units held if an investor stays put for one year.

(This article was published on March 21, 2014)
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