The Centre is set to launch a new exchange-traded fund (ETF) of shares of listed public sector firms next month.
The ETF, which will also include some part of the Centre’s holdings in the Specified Undertaking of Unit Trust of India (SUUTI), is expected to have a corpus of ₹5,000 crore to ₹6,000 crore.
“This will be the second PSU-ETF. Based on market conditions, it will be launched by the end of February or early March to ensure that it gets completed this fiscal,” said a government official.
The Department of Investment and Public Asset Management has appointed ICICI Prudential Asset Management Company as the asset management company for the creation and launch of the new ETF.
It is in the process of appointing a legal adviser for the offer now.
“We have called for bids. The selection process should be over by the end of the month,” the official told BusinessLine .
A PSU-ETF is an index scheme. It is listed on the stock exchanges and tracks the CPSE index. “It is an additional form of disinvestment which will help monetise government holdings in listed PSUs. Often, investors prefer this as it is considered a safer option,” noted the official.
The proceeds from the second ETF will come in handy for the Centre, which has set a target of raising ₹56,500 crore from disinvestment in state-run firms this fiscal. Of this, it has targeted ₹36,000 crore from minority stake sales and an additional ₹20,500 crore from strategic sales in PSUs.
By November end, it had, however, realised only ₹23,5282 crore as disinvestment proceeds, including minority stake sales in 14 public sector units and disinvestment of SUUTI holdings.
In March 2014, the Centre had launched the first such ETF with stocks of 10 public sector units, including those of Oil and Natural Gas Corporation, GAIL India, Coal India Ltd, Rural Electrification Corporation and Oil India Ltd. It had raised about ₹3,000 crore from the exercise.