Attract ETFs, retail funds in divestment: NSE

Our Bureau Kolkata | Updated on March 13, 2013

The National Stock Exchange has drawn the attention of the Government to consider encouraging the retail funds (mutual funds) and ETFs to participate in the disinvestment of public sector units.

Ravi Varanasi, Senior Vice-President, NSE, said this at a CII-organised meeting here on Wednesday. He said, in 1997 Hong Kong had adopted a successful disinvestment procedure involving the ETFs. NSE sources told Business Line that the exchange, which is attempting to promote ETFs on its platform, was keen to see that ETFs or retail funds actively participate in disinvestment process. The retail investors largely missed out on the disinvestment so far this fiscal as the Government opted for OFS or auction traded route. “For funds to bid in the auctions are easier than a retail investor even if he or she is an HNI,” said a merchant banker.

But Prithvi Haldea, founder of Prime Database told Business Line: “What we need is a decent discount to the institutional price for disinvestment — say 20 per cent — to ensure retail participation in PSU disinvestment.” He is also on the SEBI committee for primary capital market.


Published on March 13, 2013

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