Government may consider Rs. 6Kcr greenshoe option in CPSE-ETF
The government is considering exercising greenshoe option worth Rs. 4,000-6,000 crore in the Central Public Sector Enterprises- Exchange Traded Fund (CPSE ETF FF03) over the base issue size of Rs. 8,000 crore. CPSE ETF, which works like a mutual fund scheme, is an instrument with which the government divests its stake in the CPSEs without hitting the secondary market directly with individual PSUs.
Government is yet to finalize the decision, says official
"The base issue size in the fourth round of CPSE ETF issue is Rs. 8,000 crore and this time a greenshoe option has been kept which may be between Rs. 4,000 crore and Rs. 6,000 crore," said Reliance Nippon Life AMC Co-Chief Business Officer Saugata Chatterjee. The officer further added, "However, the government is yet to decide on this."
Target amount highest compared to three previous ETF issues
Reliance Nippon Life AMC is the manager of the fourth tranche of the CPSE ETF. The target amount is the highest compared to the three previous issues of the ETF. In the new fund offer (NFO) in 2014, the issue size was Rs. 3,000cr, the first Further Fund Offer (FFO1) size was Rs. 6,000cr in January'17 followed by FFO2 of Rs. 8,500cr in March'17.
No over-allotment option available, AMC had to refund excess application
However, there was no over-allotment option available due to which the asset management company (AMC) had to refund the excess application. A discount offer of 4.5% has been decided in this issue against 2.5% in the previous issue of March 2017.
Divestment target: Rs. 80,000cr; government's achievement: just Rs. 15,247cr
Out Rs. 80,000cr target from divestment in 2018-19, the Center has been able to achieve only Rs. 15,247cr, latest data showed. Chatterjee, who has also worked with ICICI Bank Ltd, says he is hopeful of large scale participation in the issue that opens for anchor investors on November 27 and for retail investors on November 28 despite liquidity crunch triggered by the IL&FS default.
Number of stocks now 11 compared to previous issues' 10
Chatterjee further said in the current issue, the composition has changed where NTPC, SJVN, and NBCC have made the entry while, Concor, EIL Ltd, and GAIL have exited. The total number of stocks now stands at 11 compared to 10 in the earlier three issues.
