CPSE ETF oversubscribed by 2 times, gets bids worth Rs 12,000 crore

The second tranche sale of government`s exchange traded fund (ETF) of top 10 state-owned companies saw bids worth Rs 12,000 crore from investors, which is twice the amount sought to be raised.

New Delhi: The Central Public Sector Enterprises (CPSE) Exchange Trade Fund (ETF) received  overwhelming response as issue got over-subscribed by wide margin.

CPSE ETF FFO saw bids of approx Rs 12,000 crore (USD 1.7 billion) -- Over two and half times the base issue size of Rs 4,500 crore (USD 471 million).

FFO was launched from January 17, 2017 till January 20, 2017. Investors across all categories offered 5 percent upfront discount.

CPSE ETF FFO received applications from over 2 lakh investors across 300 cities across India. This was the largest disinvestment program undertaken by the government using ETF and largest fund offering by any mutual fund in India till date. Anchor investors submitted bids of Rs 6,000 crore (USD 895.5 Million).

Morgan Stanley, Nomura, Kotak MF, EPFO, SBI Bank, LIC amongst prominent Domestic and Foreign Institutions that participated as anchor investors. Non-anchor portion received bids of Rs 6,000 crore -- two times of Rs 3,000 crore ( Base) reserved in the issue. Non-anchor portion was largely subscribed by retail investors and PFS – both domestic and foreign.

Retail Investors will get first preference and assured allotment as part of the CPSE ETF FFO norms. CPSE ETF FFO planned to raise up to Rs 4,500 crore (USD 671 million). As base issue size, with an option to retain over-subscription of Rs 1500 crore.