Govt likely to achieve revised disinvestment target of Rs 16,000 crore with CPSE-ETF

With strong investor response to the current CPSE-Exchange Traded Fund (ETF), the government is likely to achieve the revised disinvestment target of Rs 16,000 crore for the current fiscal. Buoyed by strong demand from retail and institutional investors, CPSE- ETF, involving the equity shares of ten PSUs, has garnered cumulative bids of over Rs 2,400 crore at the end of third day on March 20. The government aims to garner Rs 3,000 crore from this ETF with the closure of the new fund offer by March 21.

The CPSE-ETF, which will get listed on the stock exchanges on April 11 and can be traded like any stock, consists of a basket of 10 blue-chip public sector enterprises, including Coal India, ONGC, Oil India and IOCL and among other. CPSE-Exchange Traded Fund, which opened for anchor investors. State Bank of India and insurance companies, have already put in Rs 835 crore into this ETF.

The Government had originally planned to raise Rs 30,000 crore through disinvestments during current fiscal, but after stake sale plan with regard to some of the PSUs did not go as planned, it pruned the target to Rs 16,000 crore. Now the government is tapping the ETF route for achieving disinvestment target. The government has so far undertaken two follow-on public offers (FPOs), six offers for sale (OFS) and one buy-back offer besides the present ETF to achieve the disinvestment targets during the current year.