Bharat-22 ETF gets Rs 23,500-cr bids, govt to retain extra Rs 4,368 cr

Topics Bharat-22 ETF

Illustration by Ajay Mohanty

The fourth tranche of Bharat-22 exchange traded fund was subscribed nearly 12 times on the final day of offering on Friday, with the issue garnering bids worth Rs 23,500 crore.

Through the Bharat-22 ETF, comprising shares of 22 companies, the government had targeted to raise an initial amount of Rs 2,000 crore with a green-shoe option to retain additional subscription.

The government has decided to exercise the green-shoe option and retain the additional Rs 4,368 crore worth bids received, the Department of Investment and Public Asset Management (DIPAM) said in a tweet.

The scheme, which is managed by ICICI Prudential Mutual Fund, was opened for anchor investors on Thursday and for retail and other non-institutional investors on Friday.

The investors would get a 3 per cent discount over the issue price.

"Bharat-22 FFO2 was oversubscribed by almost 12 times over base issue size of Rs 2,000 crore @ Rs 23,500 crore. Government of India will retain Rs 4,368 crore from the offer," DIPAM said.

In the anchor investor category, the offering was subscribed 27 times raising more than Rs 13,500 crore.

The government has so far raised around Rs 35,900 crore through Bharat-22 ETF -- Rs 14,500 crore was garnered in November 2017, another Rs 8,400 crore was mopped up in June 2018 and Rs 13,000 crore in February this year.

Proceeds from the ETF will help the government meet its disinvestment target of Rs 1.05 lakh crore for the current financial year.

"We believe investing in this ETF is one of the ways of owning jewels of corporate India which seek to provide growth and stability," said Nimesh Shah, MD and CEO, at ICICI Prudential AMC.

The central public sector enterprises that are part of the Bharat-22 ETF include ONGC, IOC, SBI, BPCL, Coal India and Nalco.

Bharat Electronics, Engineers India, NBCC, NTPC, NHPC, SJVNL, GAIL, PGCIL, NLC India, Axis Bank, ITC and L&T are the other constituents.

Only three public sector banks -- SBI, Indian Bank and Bank of Baroda -- figure in the Bharat-22 index.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel