The Finance Ministry is likely to replace GAIL, Engineers India Ltd (EIL) and Container Corporation with new PSUs in the CPSE Exchange Traded Fund (ETF) since the government holding in these companies has fallen below 55 per cent.
CPSE ETF, which functions like a mutual fund scheme, comprises scrips of 10 bluechip PSUs namely ONGC, Coal India, IOC, Oil India, PFC, Bharat Electronics, REC, GAIL, EIL and Container Corporation of India.
Officials said three PSUs or more would be included in the CPSE ETF basket to replace GAIL, EIL and Container Corp and the number would depend upon the value of the scrip and the corresponding weightage in the ETF basket.
GAIL India, Container Corp and EIL have weightage of 11.25 percent, 5.08 per cent and 2.28 percent, respectively in CPSE ETF. CPSE ETF was set up in 2014 and the government has so far sold stake in the 10 companies in the basket in three tranches, thereby raising Rs 11,500 crore.
Currently, the government holds 53.34 percent, 54.80 percent and 52.02 percent stakes in GAIL, Container Corp and EIL, respectively.
When CPSE ETF was set up, a limit was fixed such that the stake sales could take place till the government holding in the 10 constituent companies reaches 55 per cent.
"Since the government holding in three CPSEs have fallen below 55 per cent, we need to replace them with new scrips. The number of companies to be included in the basket would depend on the weightage these new scrips would carry in the CPSE ETF basket," an official said.
ICICI Securities has been appointed as an adviser for the fourth tranche of the ETF, which will be launched once the Fund is reconstituted, the official said.
A final call on this would be taken by the inter-ministerial panel, chaired by Finance Minister Arun Jaitley.
Through the three tranches of CPSE ETF, the government has already raised Rs 11,500 crore - Rs 3,000 crore from the first tranche in March 2014; Rs 6,000 crore from the second in January 2017 and Rs 2,500 crore from the third in March 2017.
The government has budgeted to raise Rs 80,000 crore through disinvestment in the current fiscal. It has already mopped up Rs 9,220 crore so far.