Retail investors to get nearly half of Rs 6,000 cr CPSE ETF

Retail investors will garner nearly half the allotment of the Rs 6,000 crore second tranche of CPSE Exchange Traded Fund.

The Reliance Mutual Fund-managed Central Public Sector Enterprises - Exchange Traded Fund (CPSE ETF), which opened for subscription last week, was over-subscribed by 2.30 times, with bids worth Rs 13,802 crore pouring in against the issue size of Rs 6,000 crore.

Together with the ETF proceeds, government has garnered Rs 30,000 crore from PSU disinvestment this fiscal. It will sell 10 percent stake in state-run miner MOIL tomorrow to garner Rs 480 crore.

Department of Investment and Public Asset Management (DIPAM) Secretary Neeraj Gupta said that Rs 2,455 crore subscription has come from retail buyers, while pension funds and HNIs have put in bids for Rs 3,108 crore and Rs 394 crore respectively.

Retail investors will get preference in the allotment of units in CPSE ETF and hence almost all of the bids would get accepted. After retail investors, pension funds would get the preference. As many as 163 applications came in from retirement funds.

About 60 percent of the subscriptions from pension funds would get allotment in the second tranche of the ETF which closed on January 20.

The government had reserved Rs 1,800 crore for anchor investors in the CPSE ETF, which put in bids for about Rs 6,000 crore.

As many as 12 Foreign Portfolio Investors (FPIs) put in bids for Rs 3,572 crore.

"Retail investors are interested in products which are less volatile and offer stable returns. This issue of CPSE ETF will pave way for more such products in the future," Gupta said.

Taking the ETF proceeds into account, the government has so far raised Rs 30,000 crore through disinvestment this fiscal, against the target of Rs 36,000 crore through sale of minority stake.

CPSE ETF was launched in March 2014 by Goldman Sachs Asset Management India. In the inaugural issue, it raised Rs 4,300 crore against a target of Rs 3,000 crore.

Reliance Mutual Fund operates the fund now after it bought Goldman's mutual fund business in the country in 2015.