Union Finance Minister Arun Jaitley has announced the launch of a new exchange-traded fund (ETF) – Bharat-22 – comprising 22 stocks. It will have a diversified portfolio of companies from six sectors and capture the essence of PSUs better than the previous ETFs.
Bharat-22 will have a single company cap of 15 percent and a 20 percent cap on each sector.
The government had set a stiff target of Rs 72,500 crore for disinvestment in the current financial year and has collected Rs 9,300 crore so far. Jaitley is hopeful of meeting its target with this new ETF.
He added that the 22 shares would include those of the central public sector enterprises (CPSEs), public sector banks and government's holdings under the Specified Undertaking of Unit Trust of India (SUUTI).
The six sectors with their respective weightage in Bharat-22 are (in percentage terms) – Basic materials (4.4), Energy (17.5), Finance (20.3), FMCG (15.2), Industrials (22.6) and Utilities (20).
Indian MNC conglomerate L&T and the FMCG major ITC will have 17.1 percent 15.2 percent share in Bharat-22 EFT, respectively. IOC, BPCL, and NALCO will have 4.4 percent weight each. Power Grid will get 7.9 percent share, while NTPC will have 6.7 percent weightage. Lenders Axis Bank and SBI will get 7.7 percent and 8.6 percent share, respectively.
The Narendra Modi government's previous experiments with CPSE-ETF have been a success, said Jaitley, adding that ETF assets have shown significant increase globally.
CPSE-ETF (central public sector enterprises) was set up in 2014, comprising 10 companies. Earlier in March, the government had also launched fund offer (FFO) of the CPSE-ETF scheme.
Disinvestment Secretary Neeraj Kumar Gupta said, "The new fund will be well-diversified and that he expects it to perform better than the earlier ETF."
However, Jaitley and Gupta did not specify any date as on when Bharat-22 would hit the bourses.
