The CPSE ETF is an open-ended fund and the units would have a face value of Rs.10 per unit
Retail investors can participate in the government’s PSU stake sale programme by investing a minimum of Rs.5,000 to buy units of CPSE Exchange Traded Fund that comprises shares of 10 blue-chip companies, including ONGC, IOC and Coal India.
As per the draft offer document filed by the Finance Ministry with the Securities and Exchange Board of India (SEBI), individual investors can invest a minimum of Rs.5,000, while the maximum limit is Rs.10 lakh.
The CPSE ETF is an open-ended fund and the units would have a face value of Rs.10 per unit.
Non-institutional investors/qualified institutional buyers can invest in the scheme with a minimum investment amount of Rs.10 lakh, the document said.
The ETF, which is expected to hit the markets next month, could fetch government Rs.3,000 crore.
Other companies in the ETF basket are GAIL, REC, Oil India, Container Corporation, Power Finance, Engineers India and Bharat Electronics Ltd.
The EGoM, headed by Finance Minister P. Chidambaram, last month had approved floating the CPSE ETF.
The government has so far raised about Rs.5,093.87 crore through stake sales in PSUs.
As per the revised estimates in the Interim Budget, the disinvestment target has been lowered to Rs.16,027 crore this financial year from Rs.40,000 crore.
“The proposed CPSE ETF will serve as an additional mechanism for the government to monetise its shareholdings in those CPSEs that eventually form part of the ETF basket,” the government had said.
Goldman Sachs is acting as the asset management company for the ETF.
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.
ETFs were introduced in India in 2001. At present, 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.