Markets

CPSE ETF sixth tranche gets subscribed 5 times at ₹40,000 cr

Our Bureau Mumbai | Updated on July 22, 2019 Published on July 22, 2019

Exercising green-shoe option, the Centre may take ₹11,000 cr

The sixth tranche of Reliance Nippon Life AMC-managed CPSE ETF has received subscription of over ₹40,000 crore up to 5 pm against the issue size of ₹8,000 crore.

The final subscription may be higher as the fund house is still counting the total response.

As of 5 pm, the CPSE ETF FFO5 was subscribed five times, in excess of ₹40,000 crore, against the base issue size of ₹8,000 crore. Given the positive response, the government may exercise the green-shoe option to retain more than ₹3,000 crore.

The sixth tranche of the CPSE ETF has attracted investment from many eminent global and domestic investors.

Sundeep Sikka, Executive Director and Chief Executive Officer, Reliance Nippon Life Asset Management, said the fund house has contributed towards the government’s disinvestment programme by launching another tranche of CPSE ETF and managed to register record collections in this tranche relative to all earlier tranches.

On Thursday, the anchor portion of the fifth round of follow-on CPSE ETF was subscribed 8.33 times with subscription of ₹19,980 crore against the base issue size of ₹2,400 crore.

Qualified institutional buyers that participated in the CPSE ETF are: Avendus Absolute Return Fund, BNP Paribas Arbitrag, CIMB Bank Berhad Singapore Branch, Citigroup Global Markets Mauritus, Copthall Mauritius Investment, Credit Suisse Singapore, DB International (Asia), Edelweiss Alpha Fund Scheme-I, Edelweiss Trusteeship Co Ac- Edelweiss MF Ac- Edelweiss Balance Advantage Fund, Goldman Sachs Investment Mauritius, ICICI Prudential Balanced Advantage Fund, ICICI Prudential Dividend Yield Equity Fund and ICICI Prudential Equity & Debt Fund, among others.

Acceptance of the application is subject to being complete in all respects and submission of the relevant required documents, said the fund house. Overall, the government has raised ₹38,500 crore from 8.76 lakh investors.

Healthy returns

CPSE-III and CPSE-IV have delivered a return of 28 per cent and 12 per cent against the Nifty return of Nifty and Sensex TRI of 11 and 3 per cent.

In order to attract retail investors, the government had given a discount of 3 per cent on the “FFO 5 reference market price” of underlying shares of Nifty CPSE Index to all categories of investors.

By investing in the CPSE ETF, investors get to play on the India growth story through investment in large CPSE stocks at attractive valuations.

Published on July 22, 2019
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