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CPSE ETF may rise over Rs 20,000 crore

New Delhi

22-March-2019

 The fifth tranche of the Central Public Sector Enterprises Exchange Traded Fund (CPSE ETF) has raised more than Rs 20,000 crore over the base issue size of Rs 3,500 crore, and the government may exercise the entire Greenshoe option of Rs 10,000 crore in this current round, sources said.

Greenshoe option is a clause used during an initial public offering (IPO) wherein the underwriters get to buy an additional 15 per cent of the company's shares at the offering price. In this case, the government can retain or has the greenshoe option of up to Rs 10,000 crore from the excess subscription received. 

In the fifth tranche, the CPSE ETF managed by Reliance Nippon Life AMC (RNAM) received subscription of more than Rs 20,000 crore till 5 p.m. against an issue size of Rs 3,500 crore. The CPSE ETF FFO4 was oversubscribed by six times in excess of Rs 20,000 crore. 

Sources said the government may exercise the entire Greenshoe option of Rs 10,000 crore in the current round of the CPSE ETF.

On March 19, the anchor book was oversubscribed by 5.78 times against an anchor base issue size of Rs 1,050 crore and the RNAM had received applications worth Rs 6,072 crore.

The CPSE ETF has global and domestic investors such as Merill Lynch, Morgan Stanley, Goldman Sachs, JP Morgan, Citigroup and ICICI Prudential Mutual Fund.

"We are proud to have contributed to the government's disinvestment programme by partnering for the CPSE ETF," said Sundeep Sikka, Executive Director and Chief Executive Officer, Reliance Nippon Life AMC. 

"The RNAM is delighted with the participation of various foreign and domestic institutional investors such as alternative investment funds (AIFs), foreign portfolio investors, MFs etc., he said.

With this revenue generation, the government has surpassed the disinvestment target of Rs 80,000 crore. -IANS