CPSE Exchange Traded Fund new tranche aims to raise Rs 3,500 cr

Government's last ditch efforts to somehow get closer to the Rs 80,000 crore disinvestment target in the current fiscal will see the fresh CPSE Exchange Traded Fund (ETF) opening for subscription on Tuesday to raise at least Rs 3,500 crore. The fourth Further Fund Offer (FFO) will be open from March 19-22.

Manager of the FFO, Reliance Mutual Fund said the fifth tranche would open for subscription on March 19, for anchor investors and non-anchor investors, including retail investors, who can put in their bids from March 20-22. 

This would be the second CPSE (Central Public Sector Enterprises) ETF FFO in the current fiscal after a record Rs 17,000 crore raised in November 2018. 

So far, the government has raised a total of Rs 28,500 crore through CPSE ETF, including the first offer in March 2014 that mopped up Rs 3,000 crore. 

The government and Reliance MF expect the CPSE ETF to trade at very attractive valuations. 

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As on February 28, the dividend yield of the index was as high as 5.52 per cent, compared to 1.25 per cent for the Nifty 50, says the MF. 

The ETF tracks shares of 11 CPSEs -- ONGC, NTPC, Coal India, IOC, Rural Electrication Corp, Power Finance Corp, Bharat Electronics, Oil India, NBCC India, NLC India and SJVN. 

Through the latest offer, the government aims to raise an initial amount of Rs 3,500 crore and the offer size could be raised, as per Reliance MF. 

The government has raised Rs 56,473.32 crore through disinvestment till February 28, as against the target of Rs 80,000 crore for the 2018-19 fiscal.