Bharat 22 ETF Opens For Retail Investors

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Bharat 22 ETF Opens For Retail Investors
Vishav - 03 October 2019

The government on Thursday launched a fresh tranche of the Bharat-22 Exchange Traded Fund (ETF) to raise Rs 8,000 crore from investors. While the issue opened for anchor investors on Thursday, it will open for retail and other institutional investors from Friday.

According to scheme information document, the minimum investment amount for individuals is Rs 5,000 while it is Rs 10 crore for anchor investors. The maximum investment amount a retail investor can make is Rs 2 lakh. The scheme also offers a three per cent discount over the issue price for all the investor categories.

The fund, managed by ICICI Prudential Mutual Fund, was launched in 2017 along with creation of specially designed S&P BSE Bharat-22 Index. The scheme aims to provide returns that closely correspond to the returns provided by the index which is a unique blend of shares of key Central Public Sector Enterprises, Public Sector Banks and also the government owned shares in blue chip private companies like Larsen & Tubro, Axis Bank and ITC.

The Government has so far raised around Rs 35,900 crore through the fund, out of which Rs 14,500 crore was raised in November 2017, Rs 8,400 crore in June 2018 and Rs 13,000 crore in February this year.

The government has set a divestment target of Rs 1.05 lakh crore for the current financial year and the proceeds from the ETF will help the government in meeting the same.

The S&P BSE Bharat-22 Index comprises six sectors (basic materials, energy, finance, FMCG, industrials and utilities), which makes the index broad-based and diversified. It is rebalanced annually.

The Index constituents include leading Maharatanas and Navratanas such as Coal India, GAIL, Power Grid Corporation of India Ltd. (PGCIL), National Thermal Power Corporation (NTPC), Indian Oil Corporation Ltd., Oil & Natural Gas Corporation (ONGC), Bharat Petroleum, and National Aluminum Company (NALCO), three Public Sector Banks such as SBI, Bank of Baroda apart from the 3 private sector companies.

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