Bharat 22 ETF gets created for government's disinvestment program
Calling it the most significant announcement made this year on the stake divestment program of the NDA government, Union Finance Minister Arun Jaitley said that the center has now created a new ETF named Bharat 22. This exchange traded fund (ETF) will contain 22 companies, or investments from central PSUs, PSBs and strategic holdings in the Specified Undertaking of UTI (SUUTI). Here's more.
What's it all about ?
An exchange traded fund is a traded security that keeps a tab of on underlying assets, like an assortment of firms or commodity. The government had earlier okayed the ETF route for divestment of its stakes in central public sector undertakings (CPSEs). FinMin Jaitley mentioned that the Bharat 22 ETF will contain a diversified portfolio of 22 companies belonging from six different sectors.
What's in it?
The sectors are basic materials, energy, financial, FMCG (fast moving consumer goods), industrial and utilities. Jaitley added that "No sector crosses the 20% sectoral capping and there is a stock capping of 15%." NALCO is in the basic materials category, the energy sector has ONGC, Indian Oil, BPCL and Coal India, the finance sector has SBI and Axis Bank, and FMCG has ITC.
What's the target?
The NDA government had garnered Rs. 8,500 crore through the CPSE ETF route in last fiscal, Jaitley informed. For current fiscal, the center has set for itself, an ambitious target of Rs. 72,500 crore. Of which, Rs. 46,500 crore will be raised via disinvestment and Rs. 15,000 crore, via strategic disinvestment, which involves giving up majority control that the government has in a firm.
