An Empowered Group of Ministers (EGoM) met on Monday to give final shape to the proposed CPSE Exchange Traded Fund (ETF), which will comprise shares of 10 bluechip state-owned firms and solicit retail participation.
“Ten public sector companies will be part of PSU ETF,” Finance Minister P Chidambaram told reporters after the meeting of the EGoM on CPSE ETF.
Deputy Chairman of Planning Commission Montek Singh Ahluwalia, Commerce and Industry Minister Anand Sharma, and Oil Minister Verappa Moliy also attended the EGoM.
The ETF, which is expected to hit the markets this month, would have a corpus of Rs 3,000 crore and will be used as a vehicle for government stake sale in major PSUs, including ONGC, IOC and Bhel.
ETF is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange.
As per the draft prospectus filed with market regulator Sebi, individual retail investors can invest a minimum of Rs 5,000, while the maximum limit is Rs 10 lakh in the ETF.
Non-institutional investors/qualified institutional buyers can invest in the scheme with a minimum investment amount of Rs 10 lakh.
Companies in the ETF basket include Gail, REC, Oil India, Container Corporation, Power Finance, Engineers India and Bharat Electronics.
The government has raised about Rs 5,093.87 crore through disinvestment this year. As per the revised estimates in the Interim Budget, the disinvestment target has been lowered to Rs 16,027 crore from Rs 40,000 crore.
Goldman Sachs is acting as the asset management company for the CPSE ETF.
ETFs were introduced in India in 2001. Currently, there are about 33 ETFs with assets under management of close to Rs 11,500 crore held by 6.2 lakh investors. Gold ETFs dominate the market in India.
