Bharat-22 ETF

Abbreviations:
ETF - Exchange Traded Fund
SBI - State Bank of India
FFO - Follow-on Fund offer
BoB - Bank of Baroda
ONGC - Oil and Natural Gas Corporation
IOC - Indian Oil Corporation
BP - Bharat Petroleum

The 2nd Tranche of Bharat-22 ETF comprising shares of 22 companies received a bid worth 15,436 crore, much higher than Govt's Fund rising target.

• 2nd Tranche was targeted to achieve fund mop up of Rs.6000 Cr with green-shoe option for another Rs. 2400Cr.
• At the end of bidding of 2nd Tranche, The ETF was over-subscrived by 2.57 times base issue size of Rs.6000 Cr.
• Total of 1.2 lakh bids were made for FFO, attracting wide participation across all investor segments
• Govt. is likely to exercise green-shoe option to retain additional Rs. 2400 Crore worth bids received

Bharat-22 ETF

• Bharat 22 is well-diversified ETF spanning 6 sectors- basic materials, energy finance, industrials, FMCG and utilities
• It was launched by Union Govt. to meet some part of its disinvestment target of Rs. 80,000 crore in current fiscal
• Banking segment includes stocks from SBI, Axis bank, Bank of Baroda, India Bank, Rural Electrification corporation and Power finance corporation
• Energy segment includes ONGC, IOC, BP and Coal India.

ETF:

• Exchange Trade funds are essentially index funds that are listed and traded on exchanges like stocks
• They are basically basket of stocks with assigned weights that reflects the composition of index.
• They are similar to mutual funds in a certain manner but are more liquied as they can be sold quickly on stock exchanges like shares.
• The ETFs trading value is based on the net asset value of the underlying stocks that is represents
• Their price changes daily as they are traded throughout the day
• ETF route is considered as safer mode of disinvestment as it shields investors against stock market volatility