The government will open the Bharat 22 ETF follow on offer on February 14, 2019 to mop up at least Rs. 3500 crore. The sale offer would be for a single day and both the retail and institutional investors can make their bids on the same day.
For the FPO, base issue size is pegged at Rs. 3500 crore, with an option to retain any additional subscription. This is an on-tap issuance. The proceeds from the offer will help the government in reaching its divestment target of Rs. 80,000 crore set for the current fiscal year. So far, the government has succeeded in garnering a total of Rs. 36,000 crore by selling a portion of its stake in PSUs and via exchange traded funds or ETFs.
It is worth highlighting that a regular follow-on fund offer (FFO) remains opens for 4 days, the first day being reserved for anchor investors and the remaining days are open for subscription by retail and institutional investors. But as the Bharat 22 ETF FFO is an on-tap issuance offering, subscription can be made for just a single day.
In total, the government through Bharat 22 ETF has raised Rs. 22,900 crore. The CPSEs that make up the ETF include ONGC, IOC, SBI, BPCL, Coal India and Nalco. Other companies making up the ETF include Bharat Electronics, Engineers India, NBCC, NTPC, NHPC, SJVNL, GAIL, PGCIL and NLC India. Only three public sector banks - SBI, Indian Bank and Bank of Baroda. Also, government's stake in L&T, ITC and Axis Bank, held via SUUTI also form the part of Bharat 22 ETF.