Bharat-22 ETF launched; government eyes Rs 8,000 crore

New Delhi: The government on Tuesday launched the BHARAT-22 Exchange Traded Fund (ETF) managed by ICICI Prudential Mutual Fund targeting an initial amount of about Rs 8,000 crore.

The ETF, which is a diversified portfolio of 22 blue chips, will open for non- anchor investors on November 15 and close on November 17. This ETF is a part of government's overall disinvestment programme, which has set a target of realising Rs 72,500 crore this fiscal.

The units of the scheme will be allotted 25% to each category of investors. In this ETF, the Retirement Fund has been made separate category of Investors. In case of spill-over, additional portion will be allocated giving preference to retail and retirement funds. There is a 3% discount across the board.

The strength of this ETF lies in the specially created Index S&P BSE BHARAT-22 INDEX. This Index is a unique blend of shares of key CPSEs,Public Sector Banks (PSBs) and also the government owned shares in blue chip private companies like Larsen & Tubro (L&T), Axis Bank and ITC.

The shares of the state-run companies represent 6 core sectors of the economy - finance, industry, energy, utilities, fast moving consumer goods (FMCG) and basic materials.

This combination makes the Index broad-based and diversified. The sector and stock exposure limits help in risk management and reduction of concentration, providing stability to the Index.

The strength of the Index has been demonstrated in its performance from the time of its launch in August 2017 wherein it has out-performed the NIFTY-50 and Sensex.

The Index constituents include leading Maharatanas and Navratanas such as Coal India, GAIL, Power Grid Corporation of India Ltd. (PGCIL), National Thermal Power Corporation (NTPC), Indian Oil Corporation Ltd., Oil & Natural Gas Corporation (ONGC), Bharat Petroleum, and National Aluminum Company (NALCO), three Public Sector Banks such as SBI, Bank of Baroda apart from the 3 private sector companies mentioned earlier.