10 blue-chip firms to be part of CPSE ETF
11 March 2014 12:41 AM GMT
‘Ten public sector companies will be part of PSU ETF,’ Finance Minister P Chidambaram told reproters after the meeting of the EGoM on CPSE ETF. Deputy Chairman of Planning Commission Montek Singh Ahluwalia, Commerce and Industry Minister Anand Sharma, and Oil Minister Verappa Moliy also attended the EGoM.
The ETF, which is expected to hit the markets this month, would have a corpus of Rs 3,000 crore and will be used as a vehicle for government stake sale in major PSUs, including ONGC, IOC and Bhel.
ETF is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange.
As per the draft prospectus filed with market regulator Sebi, individual retail investors can invest a minimum of Rs 5,000, while the maximum limit is Rs 10 lakh in the ETF. Non-institutional investors/qualified institutional buyers can invest in the scheme with a minimum investment amount of Rs 10 lakh. Companies in the ETF basket include GAIL, REC, Oil India, Container Corporation, Power Finance, Engineers India and Bharat Electronics Ltd. The government has so far raised about Rs 5,093.87 crore through stake sales in PSUs this fiscal. As per the revised estimates in the Interim Budget, the disinvestment target has been lowered to Rs 16,027 crore this financial year from Rs 40,000 crore. Goldman Sachs is acting as the asset management company for the CPSE ETF.
ETFs were introduced in India in 2001. Currently, there are about 33 ETFs with assets under management of close to Rs 11,500 crore held by 6.2 lakh investors. Gold ETFs dominate the market in India.
Private corp bond placement falls 29% in April-December
Mumbai: Higher interest rates and the weak economic environment have led to a steep 29 per cent fall in fund mobilisation through corporate bonds on private placements during the first nine months of the outgoing fiscal, says a study.
During the April-December period, banks, financial institutions, and corporates together raised Rs 1,81,808 crore through private debt placements as against Rs 2,56,327 crore mobilised last year,’ Pranav Haldea, managing director of Prime Database, which released the study, said on Monday.
‘There was reluctance from institutions and corporates to raise debt funds due to higher interest rate scenario and also as overall economic condition remained weak. Probably, we can see an increase in issuance post election,’ Haldea said.
The study said Rs 1,81,808 crore was mobilised by 188 institutions and corporates, from the deals which had a tenor and put/call option of above 365 days.
The biggest mobilisation in the period was made by the financial institutions and banks at Rs 98,145 crore in comparison to Rs 1,35,379 crore in the year-ago period, a decrease of 27 per cent, the study said. Private sector issuance of coporate bond via private placements witnessed a decrease of 25 per cent at Rs 66,632 crore as against Rs 88,336 crore in the previous year. Mobilisation by state financial institutions also decline by 73 per cent at Rs 1,251 crore compared to Rs 4,569 crore. PSUs' mobilisation also declined 43 per cent at Rs 13,069 crore in the period compared to Rs 23,052 crore last year.
State-level undertakings also saw a major fall of 46 per cent at Rs 2,711 crore in mobilisation of funds through issuance of corporate bonds on private placement basis, the study said.
The ETF, which is expected to hit the markets this month, would have a corpus of Rs 3,000 crore and will be used as a vehicle for government stake sale in major PSUs, including ONGC, IOC and Bhel.
ETF is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange.
As per the draft prospectus filed with market regulator Sebi, individual retail investors can invest a minimum of Rs 5,000, while the maximum limit is Rs 10 lakh in the ETF. Non-institutional investors/qualified institutional buyers can invest in the scheme with a minimum investment amount of Rs 10 lakh. Companies in the ETF basket include GAIL, REC, Oil India, Container Corporation, Power Finance, Engineers India and Bharat Electronics Ltd. The government has so far raised about Rs 5,093.87 crore through stake sales in PSUs this fiscal. As per the revised estimates in the Interim Budget, the disinvestment target has been lowered to Rs 16,027 crore this financial year from Rs 40,000 crore. Goldman Sachs is acting as the asset management company for the CPSE ETF.
ETFs were introduced in India in 2001. Currently, there are about 33 ETFs with assets under management of close to Rs 11,500 crore held by 6.2 lakh investors. Gold ETFs dominate the market in India.
Private corp bond placement falls 29% in April-December
Mumbai: Higher interest rates and the weak economic environment have led to a steep 29 per cent fall in fund mobilisation through corporate bonds on private placements during the first nine months of the outgoing fiscal, says a study.
During the April-December period, banks, financial institutions, and corporates together raised Rs 1,81,808 crore through private debt placements as against Rs 2,56,327 crore mobilised last year,’ Pranav Haldea, managing director of Prime Database, which released the study, said on Monday.
‘There was reluctance from institutions and corporates to raise debt funds due to higher interest rate scenario and also as overall economic condition remained weak. Probably, we can see an increase in issuance post election,’ Haldea said.
The study said Rs 1,81,808 crore was mobilised by 188 institutions and corporates, from the deals which had a tenor and put/call option of above 365 days.
The biggest mobilisation in the period was made by the financial institutions and banks at Rs 98,145 crore in comparison to Rs 1,35,379 crore in the year-ago period, a decrease of 27 per cent, the study said. Private sector issuance of coporate bond via private placements witnessed a decrease of 25 per cent at Rs 66,632 crore as against Rs 88,336 crore in the previous year. Mobilisation by state financial institutions also decline by 73 per cent at Rs 1,251 crore compared to Rs 4,569 crore. PSUs' mobilisation also declined 43 per cent at Rs 13,069 crore in the period compared to Rs 23,052 crore last year.
State-level undertakings also saw a major fall of 46 per cent at Rs 2,711 crore in mobilisation of funds through issuance of corporate bonds on private placement basis, the study said.
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