With stake in as many as 22 companies across 6 sectors, the new-government backed ETF is expected to provide you gains higher than the benchmark Nifty and Sensex. Today, the ETF opens for the anchor investors that aims to raise in total Rs. 8000 crore. Retail investors can bet in the New Fund Offer from tomorrow until November 17.
As part of the government's divestment plans, the new ETF aims to bring broad ownership into public sector enterprises.
Know Why Bharat 22 ETF can be a good bet for you, here.
For all the investor categories, a discount of 3% is of offer. "The ETF is well diversified with investments across six core sectors, including industrials, finance, utilities, energy, FMCG (fast moving consumer goods) and basic materials, and offers good investment opportunity and expect an overwhelming response to this new fund offer," Department of Investment and Public Asset Management (DIPAM) Joint Secretary Thakur, said.
At stock level there is a cap of 15% and on sectoral basis, the maximum limit of investment is set at 20%.
Earlier the government issued CPSE ETF for divesting its stake in public enterprises. This marks another similar instrument through which government aims at offloading its stake. ETF is a tradeable security which tracks the underlying companies in Bharat 22 ETF.
The new ETF on offer comprises government's stake in Axis Bank, L&T and ITC through SUUTI or Specified Undertaking of Unit Trust of India in addition to PSBs and CPSEs.
Apart from CPSEs and PSBs, Bharat 22 also includes the government's strategic holding in Axis Bank, ITC and L&T held through the Specified Undertaking of Unit Trust of India (SUUTI).
The Bharat 22 Index will be rebalanced annually. ICICI Prudential Asset Management Company (AMC) will be the ETF Manager and Asia Index Private Limited will be the Index Provider.
While the National Aluminium Co (NALCO) is the only firm in the basic materials category in the Bharat 22 ETF, the energy sector includes the giants ONGC, Indian Oil, BPCL and Coal India.
The finance sector companies include the State Bank of India and Axis Bank, where the government holds some stake, while the only firm included in the FMCG sector is ITC.
The government had raised Rs 8,500 crore through the CPSE ETF route in the last fiscal.
In his budget speech of 2017-18, Finance Minister Arun Jaitley had promised to use ETF as a vehicle for further disinvestment of shares. The Centre has a disinvestment target of Rs 72,500 crore for the current fiscal, of which Rs 46,500 crore is planned to be raised through disinvestment, while Rs 15,000 crore is the target in the case of strategic disinvestment that involves the surrender of government's majority control of the company.