Anchor investors oversubscribe for Reliance CPSE ETF

Chennai, Jan 17 (IANS) Anchor investors of Reliance Mutual Fund Central Public Sector Enterprises Exchange Traded Fund (CPSE ETF) have bid for Rs 6,000 crore — that is, four times their reserved quota, said industry sources.

Some of the anchor investors for the fund are the State Bank of India (SBI), Axis Bank, Birla Mutual Fund, Nomura, Morgan Stanley and the Life Insurance Corporation of India (LIC).

When contacted over phone, Neeraj Kumar Gupta, Secretary, Department of Investment and Public Asset Management, confirmed the development to IANS.

Reliance Mutual Fund, a part of Reliance Capital, plans to raise Rs 4,500 crore ($671 million) through further fund offer (FFO) of its CPSE ETF.

The fund said the issue would have an option to retain over-subscription up to Rs 1,500 crore ($235.5 million).

The FFO in CPSE ETF is part of the government’s larger disinvestment programme announced by the Ministry of Finance.

The FFO opened for anchor investors on January 17 and for retail investors on Tuesday. The issue will remain open for investors from January 17 to 20.

“We are happy to be working with the government on its disinvestment programme. We are overwhelmed by the response received from investors across all categories today,” Sandeep Sikka, CEO, Reliance Mutual Fund, said.

“The issue saw very strong participating from the private sector, in addition to government participation, on the first day itself and we are hopeful of strong momemtum in the retail category that opens tomorrow,” he added.

The FFO is open for all category of investors — anchor, retail, retirement funds, foreign portfolio investors, non-institutional investors and qualified institutional buyers.

As part of the FFO, an upfront discount of 5 per cent is being offered to all category of investors.

The dividend yield of Nifty CPSE Index is approximately 4 per cent, adding to the overall merit of investing in this ETF, said Reliance Mutual Fund.

In addition, CPSE ETF has an expense ratio of 6.5 basis points, which is much lower than the other non-ETF that have an expense as high as upto 200 bps, the fund said.