Government to Raise Rs 3,500 Crore Via CPSE ETF Sale

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  1. The government has planned to launch an additional offering of Central Public Sector Enterprises (CPSE) Exchange Traded Fund (ETF).It seeks to raise at least Rs 3,500 crore in disinvestment.
  2. The government disinvestment target for the current fiscal year(2018-19) is Rs 80,000 crore.While,for the next fiscal (2019-2020),the government has set disinvestment target of Rs 90,000 crore.Disinvestment is defined as the action of an organisation (or government) selling or liquidating an asset or subsidiary.
  3. Government has constructed a fund to sell the shares in PSUs.It is called CPSE Exchange Traded Fund.The CPSE ETF is managed by Reliance Nippon Life Mutual Fund.It comprises shares of the 11 public sector undertaking companies which are (a)ONGC (b)Coal India (c)IOC (d)Oil India (e)PFC (f)REC (g)Bharat Electronics (h)NTPC (I)SJVN (j)NLC and (k)NBCC.
  4. Exchange Traded Funds (ETF) are index funds that are listed and traded on stock exchanges just like regular shares.They are a basket of stocks with assigned weights that reflect the composition of an index.
  5. The ETFs trading value is based on the net asset value of the underlying stocks that it represents.The ETF is aimed at helping speed up the government’s disinvestment programme.