NEW DELHI: Bharat 22 exchange traded fund (ETF) is all set to open for public subscription on November 15, ICICI Prudential Asset Management Company while filing the launch documents for the open-ended ETF said on Saturday. Anchor investors could participate in the new fund offer (NFO) on November 14, it said.
The NFO will close on November 17.
Announced in August this year, the government intends to raise in excess of Rs 8,000 crore from the NFO.
The ETF would mirror the S&P BSE Bharat 22 Index that comprises of select companies from the CPSE universe, stakes held under the Specified Undertaking of the Unit Trust of India (SUUTI) and public sector banks (PSBs). These include ONGC, IOC, SBI, BPCL, Coal India and Nalco, among others. Besides, Axis Bank, ITC and L&T are a few stocks comprising in the ETF that are a part of the government’s strategic holding in through SUUTI.
The index has outperformed the BSE Sensex on a risk-adjusted basis over a 10-year horizon and offered higher dividend yield historically. For portfolio diversification, weighting of individual index constituent is capped at 15 per cent while weighting of each BSE sector is capped at 20 per cent.
As part of the NFO, an upfront discount of 3 per cent would be offered to all categories of investors.
The initiative is a part of the government’s disinvestment program, announced earlier by the Department of Investment and Public Asset Management (DIPAM), Ministry of Finance and the government of India.
“We believe the ETF offers an attractive long term investment opportunity to partake in the India growth story by way of a diversified blend of companies spread across several sectors and are available at attractive valuation and a good subscription discount,” said Nimesh Shah, MD & CEO, ICICI Prudential Asset Management Company said.