The Bharat-22 exchange traded fund (ETF), which is a diversified portfolio of 22 blue chips and aims to raise an initial amount of Rs 8,000 crore for government, will open for investors tomorrow and end on November 17. The ETF will open for anchor investors on Tuesday and for non-anchor investors on November 15.
This exchange traded fund is a part of the government's overall disinvestment programme, which has set a target of realising Rs 72,500 crore this fiscal. "Bharat 22 ETF aims to bring broad-based ownership pattern to public sector enterprises. The disinvestment programme now forms the core of government's investment strategy," joint secretary at the Department of Investment and Public Asset Management, Anuradha Thakur, told reporters here, adding that though the initial issue size for the ETF was Rs 8,000 crore, the department could also consider going beyond looking at the response.
A discount of 3 per cent has been offered to all categories of investors. "The ETF is well diversified with investments across six core sectors, including industrials, finance, utilities, energy, FMCG and basic materials, and offers good investment opportunity and expect an overwhelming response to this new fund offer," Thakur added.
This ETF, which is being managed by ICICI Prudential AMC, comprises select companies from the private sector having an exposure to the extent of 39 per cent while the rest are public sector firms. "We believe the ETF offers an attractive long-term investment opportunity to partake in the India growth story by way of a diversified blend of companies spread across several sectors and are available at attractive valuation and a good subscription discount," ICICI Prudential AMC managing director and CEO Nimesh Shah said.
He further said the highlight of the scheme is its in-built mechanism for rebalancing and ability for periodic booking in stocks which has delivered better returns. The ETF mirrors the BSE Bharat 22 Index which comprises select companies from the CPSE universe, stakes held under the Specified Undertaking of the Unit Trust of India (Suuti) and public sector banks, from the underlying universe consisting CPSE companies, Suuti A group companies, and PSU banks. The total expense ratio of Bharat 22 ETF is up to 1 bps, which is the lowest in the ETF universe. "This adds to the overall merit of investing in this ETF," Shah added.