Govt launches new ETF Bharat-22 to raise Rs8,000 cr

The centre on Tuesday launched the BHARAT-22 exchange traded fund (ETF), an investment vehicle for participating in equity stocks of government-run companies, targeting an initial amount of about Rs8,000 crore.

The fund will benefit long term and retail investors by providing an opportunity of participation in equity stocks of the government run companies and earn stable returns, an official release stated.

Managed by ICICI Prudential Mutual Fund, the New Fund Offer will remain open till 17 November 2017.

Units of the scheme will be allotted 25 per cent to each category of investors. In this ETF, the retirement fund has been made separate category of Investors. In case of spillover, additional portion will be allocated giving preference to retail and retirement funds. There is a 3 per cent discount across the board.

For investors in Bharat-22 ETF, BSE has specially created the S&P BSE Bharat-22 Index. This index is a unique blend of shares of key CPSEs, public sector banks (PSBs) and also the government owned shares in blue chip private companies like Larsen & Tubro (L&T), Axis Bank and ITC.

The shares of government companies represent almost all sectors of the economy, including finance, industry, energy, utilities, fast moving consumer goods (FMCG) and basic materials. This makes the index broad-based and diversified. The sector and stock exposure limits help in risk management and reduction of concentration, providing stability to the index.

The strength of the index has been demonstrated in its performance from the time of its launch in August 2017 wherein it has outperformed the NIFTY-50 and the Sensex.

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 private sector companies like L&T, Axis Bank and ITC.