CPSE ETF oversubscribed 3.7 times, gets bids worth Rs 9,700 crore

New Delhi: The third tranche of the government's exchange traded fund (ETF) of top 10 state-owned companies saw bids worth Rs 9,200 crore from investors, which is 3.7 times the amount sought to be raised.

The Reliance Mutual Fund-managed Central Public Sector Enterprises - Exchange Traded Fund (CPSE ETF) saw all round participation from investors, with retail buyers putting in bids of over Rs 3,500 crore.

As much as 30 percent of total issue size, or Rs 750 crore, was reserved for anchor investors who put in bids worth about Rs 5,700 crore, a top official said.

Foreign institutions like BNP Paribas, Morgan Stanley, SocGen, CitiGroup and domestic investors like LIC, Exide Insurance, SBI Bank, Axis Bank and Canara Bank put in bids.

The government was looking to raise Rs 2,500 crore from the third sale of the CPSE ETF, which is part of its disinvestment plan aimed at narrowing Asia's widest fiscal deficit without reducing public spending.

"We, as Reliance, are delighted to have raised subscription interest of over Rs 23,000 crore in the ETF in last two months leading to disinvestment of Rs 8,500 crore. This clearly shows the future potential of fund raising through ETFs. We thank the government for this opportunity and will be happy to support them in their future disinvestment programs thru ETFs," RMF ED and CEO Sundeep Sikka said.

The issue which opened for subscription on March 14 closed today.

The demand for the third tranche has been robust despite the fact that the government has given a lower discount of 3.5 percent than that of 5 percent in the second tranche, sources said.

The government had raised Rs 6,000 crore in the second tranche of CPSE ETF in January and Rs 3,000 crore from the first tranche in March 2014.

The government has raised about Rs 33,000 crore through disinvestment this fiscal so far against the revised estimate of Rs 45,500 crore.

CPSE ETF was originally managed by Goldman Sachs MF, which was acquired by Reliance MF in October 2015. The finance ministry in September gave its nod for the transfer of management of CPSE ETF to Reliance Mutual Fund.