Bharat 22 ETF makes decent debut, lists 0.9% higher against issue price

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Bharat 22 Exchange Traded Fund (ETF) listed at Rs 36.30 per unit on the BSE, a 0.92% premium over its issue price of Rs 35.97 per unit. On the National Stock Exchange (NSE), it was opened 0.39% higher at Rs 36.11 per unit.

At 09:53 AM; it was trading at Rs 37.19, 3.4% higher against its issue price. It hit high of Rs 37.40 on the NSE and Rs 37.36 on the BSE so far. A combined 179.98 million shares have changed hands on both the exchanges so far.

Oil and Natural Gas Corporation (ONGC), NTPC, SJVN, Power Grid Corporation and National Aluminium Company among the S&P BSE Bharat 22 index were down more than 1%, while Bharat Electronics, Axis Bank and Gail India were trading higher by up to 1% on the BSE.

The S&P BSE Bharat 22 index, the largest loser among broader indices, was down 0.7% as compared to 0.12% decline in the benchmark S&P BSE Sensex.

The Bharat 22 ETF comprises 22 companies, or investments, from among central public sector enterprises (CPSEs) and public sector banks (PSBs). Apart from CPSEs and PSBs, Bharat 22 also includes the government's strategic holding in Axis Bank, ITC and L&T held through the Specified Undertaking of Unit Trust of India (SUUTI).

The government has raised Rs 14,500 crore through the Bharat 22 ETF. The portion reserved for retail investors was subscribed 1.45 times; retirement funds -- 1.50 times and NIIs and QIBs -- 7 times.

ICICI Prudential Mutual Fund managed Bharat 22 ETF's new fund offer (NFO) had an initial issue size of over Rs 8,000 crore. As much as 25% of total issue size, or Rs 2,000 crore, was reserved for anchor investors who put in bids worth about Rs 12,000 crore.

The 'Bharat 22' Exchange Traded Fund (ETF) is all set to open for anchor investors on November 14, while subscription for retail investors would begin from November 15 and continue till November 17.

The ETF is expected to mop up over Rs 8,000 crore for the government, helping the government meet its ambitious Rs 72,500 crore disinvestment target for the current fiscal.

The ETF will invest in 22 stocks from CPSE, SUUTI and PSU Banks listed on BSE of which 19 will be public sector companies.

The first CPSE (Central Public Sector Enterprises) ETF, which was launched in March 2014 consisted of scrips of 10 PSUs - ONGC, Coal India, IOC, GAIL (India), Oil India, PFC, Bharat Electronics, REC, Engineers India and Container Corporation of India. The government has raised Rs 8,500 Cr through CPSE ETF route last fiscal.

All you need know about the ETF:

1. An ETF is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. It provides diversification to investors and is cheaper than investing in a fund. Most ETFs track to a particular index and therefore have lower operating expenses than actively invested mutual funds. Thus, ETFs may improve your rate of return on investments. In addition, ETFs have no investment minimums or sales loads, unlike traditional mutual funds, which often have both.

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