The much-awaited exchange-traded fund (ETF) of select heavyweight Central public sector units was launched by Goldman Sachs on Friday.
CPSE-ETF is an open-ended scheme comprising 10 major PSUs such as ONGC, Gail and Coal India. The new fund offer will open for subscription on March 18 for anchor investors (investing above Rs 10 crore) and the next day for non-anchor and retail investors.
"Though ETF is a very popular (investment vehicle) globally, it is at a nascent stage in India. Also, equity ETFs are yet to gain traction here. Through the CPSE-ETF, the Government is trying to make this product popular," Alok Tandon, Joint Secretary, Disinvestment Department, told reporters at the launch here.
The new index is another option of government divesting stake in public sector enterprises, he said.
The Government plans to raise up to Rs 3,000 crore from this scheme in the outgoing fiscal, Tandon added.
Describing the scheme's benefits, he said it provides a sound opportunity for investors to be part of the top 10 PSUs - ONGC, Gail, Coal India, IndianOil, Oil India, PFC, REC, Container Corp, Bharat Electronics and Engineers India.
"While 5 per cent upfront discount will be offered to all class of investors, 6.66 per cent loyalty units (one loyalty unit for every 15 units held) will be provided for retail individual investors," he said.
The scheme is managed by Goldman Sachs India MF and will be listed on exchanges in the form of an ETF.
Asked about any further ETF involving listed government firms, the Joint Secretary said it will depend on investor response to the current scheme.