New Delhi, Jan. 10: An empowered group of ministers, headed by finance minister P. Chidambaram, today approved a PSU exchange-traded fund (ETF) comprising stocks of 11 blue-chip PSUs.
The ETF will be launched next month.
“This eGoM was to finalise the basket for PSU ETF. This basket will comprise 11 companies, all blue-chip PSUs. We expect to raise around Rs 3,000 crore,” divestment secretary Ravi Mathur said after the meeting.
The 11 companies, which have been selected from an initial list of 20, are ONGC, Coal India Ltd, GAIL (India) Ltd, PowerGrid, REC, Oil India, Container Corporation, Power Finance Corporation, Indian Oil, Engineers India and Bharat Electronics Ltd. The fund will be called Central Public Sector Enterprise Exchange Traded Fund (CPSE ETF).
The department of disinvestment has been asked to file the necessary documents with market regulator Sebi, Mathur said.
Investment in the ETF is expected to minimise the risk for investors. It will also be easier for the government to sell new offerings by getting the fund to buy some part of the stocks on offer.
Earlier last year, Goldman Sachs Asset management was appointed as an adviser.
The government, which has budgeted to raise Rs 40,000 crore through divestments this fiscal, has so far managed to garner only Rs 3,000 crore from stake sales in seven PSUs, including Power Grid Corporation, Hindustan Copper, National Fertilizers and MMTC.
Heads of several blue-chip PSU firms today assured finance minister P. Chidambaram that they will try to meet their capital expenditure plans for 2013-14 and pay dividends equal to last year’s payout.
There will be some shortfall, however, in the spending plans of the oil PSUs because of problems concerning pipeline projects in the south, petroleum secretary Vivek Rae said.
Others present at the meeting included ONGC CMD Sudhir Vasudeva, SAIL chief C S Verma and Coal India Chairman S Narsing Rao.
”There will be shortfall in our (petroleum PSUs') capex target because our pipeline in south India has been stuck for various reasons... There could be some reduction in capex of GAIL”, Rae said, adding that the ONGC will pay 195 per cent dividend. As regards the Gas Authority, he added, the PSU “will maintain what it gave last year, around Rs 700 crore.”