CPSE ETF helps government cross selloff target

Deccan Chronicle.  | RAVI RANJAN PRASAD

Nation, Current Affairs

The government also realised Rs 14,500 crore on Friday from the REC-PFC deal.

The government is likely to get Rs 10,000 crore from the CPSE ETF FFO4 as it plans to exercise the entire green shoe option of Rs 6,500 crore, along with the Rs 3,500-crore base issue size, said sources close to the merchant bankers managing CPSE ETF FFO4 that closed on Friday.

Mumbai: With the CPSE ETF Further Fund Offer 4 receiving an overwhelming market response, the central government has exceeded its disinvestment target for the second year in a row, with the selloff proceeds touching Rs 85,000 crore against the budgeted target of Rs 80,000 crore.

"As against a target of Rs 80,000 crore for disinvestment for the current year, the divestment receipts have touched Rs 85,000 crores today," Finance Minister Arun Jaitley said in tweet on Friday.

The government is likely to get Rs 10,000 crore from the CPSE ETF FFO4 as it plans to exercise the entire green shoe option of Rs 6,500 crore, along with the Rs 3,500-crore base issue size, said sources close to the merchant bankers managing CPSE ETF FFO4 that closed on Friday.

The government also realised Rs 14,500 crore on Friday from the REC-PFC deal. "PFC has today signed a Share Purchase Agreement to acquire 103.94 crore equity shares of Rs 10/- each, of REC Limited from the President of India constituting 52.63 per cent of the paid-up share capital of REC Limited." PFC said in a statement on Friday.

Earlier government had mopped up Rs 50,809.76 crore from disinvestment of various public sector enterprises. The major disinvestment mop-up in FY 2018-19 included Bharat 22 ETF(Rs 8325 crore), CPSE ETF (17,000 crore), Coal India (Rs 5,218 crore), Bharat 22 ETF FFO (Rs 10,404 crore) Inidan Oil Corporation (Rs 2,650 crore) and ONGC (Rs 2,510 crore).

As per last details available, CPSE ETF FFO4 received subscriptions of more than Rs 20,000 crore against the issue size of Rs 3,500 crore.

The government had set Rs 3,500 crore as the base issue size for the three-day issuance of the fifth tranche of the CPSE ETF. As much as 30 per cent of the issue size was reserved for anchor investors. The list of anchor investors include BNP Paribas Arbitrage, Citi Group Global Markets Mauritius, Credit Suisse Singapore, Edelweiss Alpha Fund, ICICI Prudential Balanced Advantage Fund, Merrill Lynch Markets Singapore and Morgan Stanley (France) SA.

The exchange traded fund tracks shares of 11 central public sector enterprises—ONGC, NTPC, CIL, IOC, REC, PFC, BEL, OIL, NBCC India, NLC India and SJVN. Through the earlier four ETF tranches, the Centre had raised Rs 28,500 crore--Rs 3,000 crore in March 2014, Rs 6,000 crore in January 2017, Rs 2,500 crore in March 2017 and Rs 17,000 crore in November 2018.

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