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Govt targets Rs 4,000 crore through additional Bharat-22 ETF sale

Arup Roychoudhury/New Delhi 13 Feb 19 | 02:15 AM

Illustration: Ajay Mohanty

The government will on Thursday launch yet another offering of its flagship exchange-traded fund (ETF) — Bharat-22 — to meet the divestment target of Rs 80,000 crore. The additional sale is expected to raise around Rs 4,000 crore, sources said.

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This comes alongside a sale of the Centre’s stake in Axis Bank, and buybacks from a number of state-owned companies.

There could also be offers-for-sale (OFSs) for a number of big state-owned companies, including Oil and Natural Gas Corporation (ONGC) and Oil India, and initial public offerings of companies like Mazagon Dock and MSTC.

The additional sale of Bharat-22 units would be for a single day and will be open for institutional and retail investors. This will be the second issuance of Bharat-22 ETF this fiscal year, and third overall.

The government has so far raised Rs 22,900 crore through the ETF. While Rs 14,500 crore was raised in November 2017, another Rs 8,400 crore was raised in June 2018.

Business Standard had reported in November that the Department of Investment and Public Asset Management (DIPAM) will go for another offering of Bharat-22 this year.

As of January-end, the government has mopped up Rs 35,533 crore in disinvestment for 2018-19. It has yet to factor in around Rs 15,000 crore that it will get from Power Finance Corp’s acquisition of the Centre’s stake in REC.

Additionally, Axis Bank posted on the exchanges on Monday that the Specified Undertaking of Unit Trust of India (SUUTI) will sell a 3 per cent stake in the bank, which could garner the exchequer around Rs 5,000 crore.

SUUTI currently holds a 9.56 per cent stake in Axis, 7.9 per cent stake in ITC and 1.79 per cent stake in Larsen & Toubro. The combined value of these stakes is around Rs 46,000 crore.

Almost all big state-owned companies have also announced or are expected to announce plans to buy back shares, including Oil India, ONGC, Coal India and others. Whatever shares they buy back from the Centre will count towards its disinvestment targets.

Additionally, DIPAM is still planning a number of OFSs, including that of the oil exploration companies. According to a report in Mint newspaper, Oil India’s Chairman Utpal Bora said a 10 per cent sale of the company’s stake will happen soon.

ONGC and Indian Oil are also supposed to have OFSs. DIPAM plans to do at least two more IPOs, and aims to complete the strategic sale of Central Electronics and Pawan Hans, before March 31. Officials are confident that these plans will help it meet the divestment target.

The Bharat-22 ETF comprises shares of ONGC, IOC, SBI, BPCL, Coal India, Nalco, Bharat Electronics, Engineers India, NBCC, NTPC, NHPC, SJVNL, GAIL, PGCIL, NLC India, Axis Bank, ITC, L&T, Indian Bank and Bank of Baroda.

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