The sixth tranche of Central Public Sector Enterprise (CPSE) Exchange Traded Fund (ETF) opens and closes for retail investors on Friday.
The issue opened and closed for Anchor Investors on Thursday, when the CPSE ETF Further Fund Offer or FFO 5 anchor book was oversubscribed 8.33 times. Reliance Nippon Life Asset Management (RNAM) Limited managed the 6th tranche of CPSE ETF FFO 5 for Anchor Investors.
Sources said against the Anchor base issue size of Rs 2,400 crore (considering the total base issue size of Rs 8,000 crore), RNAM received Anchor subscription worth Rs 19,980.32 crore leading to Anchor portion being oversubscribed 8.33 times.
The participation was across the category of Qualified Institutional Buyers (QIBs) i.e. FPIs (foreign portfolio investors), MFs (mutual funds) and AIFs (alternate investment funds).
Among the leading QIBs who participated were Societe Generale, Credit Suisse, Morgan Stanley, Goldman Sachs, Merrill Lynch, Citigroup, Copthall, Avendus, ICICI Prudential Mutual Fund and Edelweiss Mutual Funds.
The FFO 5 was launched based on the recent success of CPSE ETF's new fund offer (NFO) and FFOs. The Department of Investment and Public Asset Management (DIPAM) is conducting further divestment of the underlying CPSEs, which are constituents of the CPSE ETF and hence launching FFO 5 of the CPSE ETF.
The government plans to raise from FFO 5 up to Rs 8,000 crore plus an "Additional Amount".
"The Government of India (GoI) is offering a discount of 3 per cent to all categories of investors on the "FFO 5 Reference Market Price" of underlying shares of Nifty CPSE Index. This discount will be on shares offered by the GOI only, not on the shares purchased from open market," the fund manager said.
The first ETF was launched in 2014 and was followed by the offer of four more tranches in 2017 and 2018.
The Budget proposes to include CPSE ETF in Equity linked Savings Schemes category eligible for tax deductions. But the investors will have a lock-in of three years.
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