The government will launch the ‘Bharat 22’ exchange traded fund (ETF) managed by ICICI Prudential Mutual Fund, on 09 November 2017, targeting an initial amount of about Rs8,000 crore. The new fund offer will be open for subscription till 17 November and a discount of 3% is being offered to all categories of investors.
The ETF is part of the government’s overall disinvestment programme, and mirrors the S&P BSE Bharat 22 Index, which comprises select companies from the CPSE (central public sector enterprises) universe, stakes held under the Specified Undertaking of the Unit Trust of India (SUUTI), and state-run banks.
While our initial issue size for Bharat 22 ETF is Rs8,000 crore, we can also consider going beyond looking at the response in the market. The index follows a free float adjusted market cap weighing methodology, with weighting of each individual index constituent capped at 1,5%, while weighting of each BSE sector is capped at 20%.