Business Today
Loading...

Govt launches new exchange-traded fund 'Bharat 22' to divest stake in 22 firms

It's not just Air India where the government is looking to sell its stake. Finance Minister Arun Jaitley on Friday launched 'Bharat 22' Exchange Traded Fund to divest government assets in 22 state-run and private firms.

BT Online | August 4, 2017 | Updated 18:49 IST
Govt launches new exchange-traded fund 'Bharat 22' to divest stake in 22 firms

It's not just Air India where the government is looking to sell its stake. Finance Minister Arun Jaitley on Friday launched 'Bharat 22' Exchange Traded Fund to divest government assets in 22 state-run and private firms.

The new exchange traded fund consists of stocks in various CPSE (Central Public Sector Enterprises), PSB (Public Sector Banks) and strategic holding of SUUTI (Specified Undertaking of Unit Trust of India).

"Compared to energy heavy CPSE ETF, Bharat 22 is a well Diversified portfolio with 6 sectors (Basic Materials, Energy, Finance, FMCG,  Industrials & Utilities). The Bharat 22 Index will be rebalanced annually. ICICI Prudential AMC will be the ETF Manager and Asia Index Private Limited (JV BSE and S& P Global) will be the Index Provider," government said in a press release. 

Finance Minister Arun Jaitley had promised to use ETF as a vehicle for further disinvestment of shares in his Budget Speech of 2017-18.

The target for CPSE's disinvestment in 2017-18 was set at Rs 72,500 crore. During the current Financial Year 2017-18, the government has realised approximately Rs 9,300 crore through nine disinvestment transactions so far, a government release said.

Jaitley has budgeted to raise Rs 725 billion ($11.39 billion) through the asset sale programme in the fiscal year to end-March 2018.

The fund will trade government shares in four state-run energy companies - ONGC Ltd., BPCL, IOC and Coal India, he said.

It will also include banking and finance companies such as SBI, Bank of Baroda, Indian Bank, Rural Electrification Corp. Ltd., Power Finance Corp. Ltd. and Axis Bank .

New Delhi will sell shares, via the fund, in utilities like Power Grid Corp., NTPC, Gail, NHPC, NLC and SJVN.

Industrials included in the fund are: Bharat Electronics, Engineers India and NBCC.

The fund will sell government shares in ITC Ltd. and National Aluminium Co. Ltd. as well, Jaitley said.

ICICI Prudential will manage the fund, he added.

In the first four months of the 2017/18 financial year, the government has, thus far, raised 93 billion rupees($1.46 billion) through the asset sale programme, he said.

India raised 85 billion rupees $1.34 billion)through a similar fund as part of its 2016-17 asset sales programme.

Exchange Traded Funds (ETFs) are essentially Index Funds that are listed and traded on exchanges like stocks. An ETF is a basket of stocks that reflects the composition of an Index.

  • Print
  • COMMENT
BT-Story-Page-B.gif
A    A   A
close