CPSE ETF Background
CPSE ETF FFO was a success with bid were done for 12,000 crore while the offer was only for 6000 crore. There allotment is going to take place within next 10 days.
Anchor investors portion was Rs. 1500 crore but the bid was received for almost Rs. 6,000 crore on 17th January 2017 which is 4 times of the amount decided for retailers to be offered. (Some of the anchor investors for the fund are the State Bank of India (SBI), Axis Bank, Birla Mutual Fund, Nomura, Morgan Stanley and the Life Insurance Corporation of India (LIC)).
The quantum of bids for Qualified institutional buyers and retail investors was opened from 18th January 2017 to 20th January 2017 received was over two-and-half times of the base issue size of Rs 4,500 crore i.e. Rs. 6, 000 crore.
Reliance Mutual Fund CPSE ETF FFO received application over 2 lakh investors across 300 cities and towns in India. As part of the CPSE ETF FFO norms Retail Investors will get first preference and assured allotment for a minimum of 5000 units. What it mean is if there is oversubcription, the minimum unit you will receive would be 5000 units.
A finance ministry statement said ,”This was the largest Disinvestment Program undertaken by the Government of India using ETF and largest fund offering by any Mutual Fund in India till date”.
Purchase price will be average of the full day volume weighted average price of the constituents of Nifty CPSE Index on NSE during Jan 18 and Jan 20. Based on this the price is expected to be around 26.70 but then there is a 5% discount for retail investor which should bring the allotment price closer to 25.5
CPSE ETF allotment status is done on Jan 31st. The CPSE ETF allotment is expected to take place within 10 days from the closing of the issue on January 20th. The issue was oversubscribed, so partial allotment is expected. You should be able to check the status of the issue on your Demat account.