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CPSE ETF (Exchange Traded Fund) is once again open for subscription to anchor and non-anchor investors. The government is planning to raise at least Rs 10,000 crore through the seventh tranche of CPSE ETF which will open for anchor investors on Thursday and for non-anchor investors the next day.

Anchor investors are institutional investors who are invited to subscribe to the shares before the Initial Public Offers (IPO’s), while retail investors are generally referred to as non-anchor investors.

Here is all you need to know about CPSE ETF and its subscription:

What Is CPSE ETF?

CPSE ETF is an exchange-traded fund that invests in 12 state-owned companies, including Bharat Electronics Ltd., Coal India Ltd., NBCC (India) Ltd., NLC India Ltd., Oil India Ltd., Oil & Natural Gas Corporation Ltd., SJVN Ltd., Cochin Shipyard Ltd., NHPC Ltd., NMDC Ltd., and Power Grid Corporation of India Ltd., these companies are a part of Nifty CPSE Index.

This fund manages a handful of stocks having weightage, as high as 20% on the underlying index. This fund’s portfolio is concentrated towards, energy and oil sector. Its units can be traded like a stock on exchanges.

When Will It Open for Subscription?

This ETF will be open on Thursday, 30^th January 2020, for subscription by anchor investors, and will close on the same day. And for subscription by non-anchor investors, it will be open on the next day that is 31^st January 2020 and will also close on the same day.

How to invest?  

Well, investors, can purchase the units of CPSE ETF through investing platforms like BSE and NSE, also investors can buy directly from the mutual fund house if they are buying more than 1 lakh unit. The units will be available at a 3 percent discount. 

What Is the Minimum Investment Amount? 

Non-anchor investors can invest a minimum of Rs 5,000, while non-institutional investors and qualified institutional buyers (other than anchor investors) can invest a minimum of Rs 2 lakh. The minimum investment for anchor investors is fixed at Rs 10 crore.

How Much Fund Has Been Raised Earlier? 

In the financial year 2020, this fund has experienced its seventh tranche and has been raised by Rs 10,000 crore. In before 6 tranches, the government has already raised about Rs 50,000 crore, that was Rs 3,000 crore from the first tranche in March 2014, Rs 6,000 crore in January 2017, Rs 2,500 crore from the third in March 2017, Rs 17,000 crore in November 2018, Rs 10,000 crore in March 2019 and Rs 11,500 crore in July 2019. As per the government, the proceeds from the ETF will help the government meet its disinvestment target of Rs 1.05 lakh crore for the current financial year.

Who Is the Fund Manager of CPSE ETF? 

Nippon Life India Asset Management is the manager of the fund.

You can contact us at Shri Ashutosh Securities Pvt Ltd., for more details, we are here to help you in any way possible.

Happy Investing!

(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).