Finance ministry to re-balance CPSE ETF, may include new PSUs

The CPSE ETF comprises 10 state-owned bluechips and shares in these companies can be sold only till the government stake in them reaches 55 percent.

Finance ministry to re-balance CPSE ETF, may include new PSUs

New Delhi: The finance ministry is likely to rework the constituents of the CPSE Exchange Traded Fund (ETF) by either including new state-run companies or trimming the government holding threshold for existing ones to 52 percent.

The CPSE ETF comprises 10 state-owned bluechips and shares in these companies can be sold only till the government stake in them reaches 55 percent.

"Since most of the CPSEs in the basket have reached or are about to reach the threshold limit of 55 percent, there is a need to rebalance the constituents of CPSE ETF,? an official told PTI.

The ministry is in the process of appointing advisors for coming out with the 4th tranche of the CPSE ETF. ICICI Securities and SMC Capitals have bid for becoming the adviser for the Exchange Traded Fund.

The official said the adviser will draw up plan on whether new Central Public Sector Enterprises (CPSE) should be included in the ETF basket or threshold limit for existing CPSEs be brought down to 52 percent.

On lowering the threshold, the official said however that if this option is exercised, it would leave little headroom for these CPSEs to go in for further stake sales or buy back offers.

A final call would be taken by the inter-ministerial panel, chaired by the Union Finance Minister.

CPSE ETF, which functions like a mutual fund scheme, comprises scrips of 10 PSUs ONGC, Coal India, IOC, GAIL (India), Oil India, PFC, Bharat Electronics, REC, Engineers India and Container Corporation of India.

Through the three tranches of CPSE ETF, the government has already raised Rs 11,500 crore -- Rs 3,000 crore from the first tranche in March 2014; Rs 6,000 crore from the second tranche in January 2017 and Rs 2,500 crore from the third tranche in March 2017.

The government has budgeted to raise Rs 80,000 crore through disinvestment in the current fiscal. It has already mopped up Rs 9,000 crore in the April-July period.

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