INSUBCONTINENT EXCLUSIVE:
NEW DELHI: The Finance Ministry is planning to launch a global exchange traded fund (ETF) with a view to attracting long-term investment
from overseas large pension fund houses.
The new ETF, which will be constituted after studying the appetite of large investors, is being
planned for launch in the next financial year, an official said.
Initially, the ministry was planning to list Bharat-22 ETF in the overseas
market but decided not to go ahead with it as investors expressed apprehensions over the cost associated with hedging and currency
conversion.
"The target is to tap the untapped investors, which is the large overseas pension funds
A new ETF is being thought of which will be constituted based on the sectors for which these investors show their interest," the official
told PTI.
The official further said that the CPSEs in which there is substantial scope for further dilution of government equity, like where
promoter holding is above 58-60 per cent, will be included in the proposed ETF for global listing.
The government has listed two
exchange-traded funds -- CPSE ETF and Bharat-22 ETF-- on the domestic stock exchanges
ETFs function like a mutual fund scheme and have underlying assets of government-owned companies.
The government has already raised Rs
22,900 crore through two tranches of Bharat-22 ETF and Rs 11,500 crore through three tranches of CPSE ETF.
Launched in 2017-18, the Bharat
22 ETF, consist of 16 central public sector enterprises (CPSEs), three PSU banks and three private sector companies ITC, LT and Axis Bank
where Specified Undertaking of Unit Trust of India (SUUTI) holds a stake
Bharat-22 ETF basket is diversified and there should be investor demand in the overseas market, the official added.
The state-owned
companies or PSUs that are part of the new Bharat ETF-22 include ONGC, IOC, SBI, BPCL, Coal India and Nalco.
