CPSE ETF’s further fund offer oversubscribed 270%

The government's disinvestment programme got a big boost with the Central Public Sector Enterprises Exchange Traded Fund's (CPSE ETF) further fund offer (FFO) getting oversubscribed nearly 2.70 times or 270 per cent. CPSE ETF's FFO, which had a base issue size of Rs45,00 crore ($$471 million), received bids for about Rs12,000 crore ($1.7 billion) when it closed on Friday.

Reliance Mutual Fund, which manages the ETF, said that it received application from over 2 lakh investors across 300 cities and towns in India. Anchor investors submitted bids of Rs6,000 crore ($895.5 million). The non-anchor portion received bids for Rs6,000 crore or two times the Rs3,000 crore reserved for them in the issue.

The non-anchor portion was largely subscribed by retail investors and pension funds - both domestic and foreign. Retail investors were given first preference and assured allotment as part of the CPSE ETF's FFO norms.

"There has been an exceptional response from investors across all categories in this CPSE ETF FFO. From a MF perspective, this has been the largest fund offering by any mutual fund till date," said Sundeep Sikka, executive director and CEO, Reliance Nippon Life Asset Management. "We received encouraging responses especially from retail investors across the country and are confident that ETF as a category will gain momentum in future," he said.

CPSE ETF's FFO had a base size of Rs4,500 crore ($671 million) with provision to retain oversubscription of up to Rs1,500 crore. Morgan Stanley, Nomura, Kotak MF, SBI and LIC were among the prominent domestic and foreign institutions that participated as anchor investors.

Investors across all categories offered 5 per cent upfront discount for the FFO, which opened on 17 January and closed on 20 January. The FFO is part of the larger disinvestment programme announced by the Department of Investment and Public Asset Management (DIPAM), ministry of finance.