SBI Caps, ICICI Sec among 4 to advise Government on setting up ETF

Having shortlisted four investment banks for advising it on the modalities of setting up a Central Public Sector Exchange  — Exchange Traded Fund (CPSE-ETF), the government is likely to finalise advisors before November 15.

The four investment bankers – Citibank, ICICI Securities, SBI Capital Markets and Yuanta Funds — will be making a presentation before an inter-ministerial group on Thursday, a Finance Ministry official told Express.

ETF, which is an investment fund traded on stock exchanges, will have underlying assets and would be benchmarked against an index.

The CPSE-ETF will track index of the listed public sector companies. The proposed CPSE-ETF will serve as an additional mechanism for the government to monetise its shareholdings in those CPSEs that will eventually form part of the ETF basket.

The usual mode of taking a partial disinvestment offering of a CPSE to the market include initial/follow-on public offering, offer for sale through stock exchange and institutional placement programme.

Of the total of 249 central public sector enterprises and their subsidiaries, only 50 are listed.

CPSEs constitute 20.67 per cent and 19.77 per cent of the total market capitalisation of companies listed on the Bombay Stock Exchange and National Stock Exchange respectively.