Nov 21:Â Reliance Mutual Fund (RMF) today announced Further Fund Offer 3 (FFO3) of its Central Public Sector Enterprises – Exchange Traded Fund (CPSE ETF).
This FFO3 is part of the Government of Indiaâ€™s overall disinvestment program, announced earlier by the Department of Investment and Public Asset Management (DIPAM), Ministry of Finance, using the ETF route.
Reliance Mutual Fund proposes to raise upto Rs.8,000 crore (US$ 1.12 Billion) in FFO3 as â€œInitial Amountâ€ plus an â€œAdditional Amountâ€ (if any) based on instructions of The Government of India.
â€œThe Further Fund Offer 3 in the CPSE ETF is part of the governmentâ€™s larger disinvestment program that was announced earlier by the Ministry of Finance. We feel confident that the timing of the issue will help investors benefit from their exposure in a diversified basket like CPSE ETF that includes a list of distinguished PSUs who are leaders in their respective sectors.
â€œWe are delighted to announce the CPSE ETF FFO3. It offers a compelling opportunity for investors, especially retail and retirement funds, to invest in the India growth story at an attractive valuation, low expense and embedded discountsâ€, said Mr. Sundeep Sikka, ED and CEO, Reliance Nippon Life Asset Management.
The FFO3 is open for all categories of investors including Anchor Investors, Retail Investors, Retirement Funds, QIBs, Non-institutional investors and Foreign Portfolio Investor (FPIs).
As part of the FFO3, an upfront discount of 4.5% is being offered to all categories of investors.
The dividend yield of Nifty CPSE Index is approx 5.25% (Source NSE: Data as of October 31, 2018), further adding to the overall merit of investing in this ETF. In addition, CPSE ETF has a very low expense ratio of 0.95 bps.
FFO3 to open and close for Anchor Investors on November 27, 2018, and for Non Anchor Investors on November 28, 2018, and close on November 30, 2018.
â€œWe would like to reach out to retirement funds to invest in FFO3 and consider this as an opportunity to secure their funds and benefit from the growth of these PSUs – some of which are Navratnas, Maharatnas, Miniratnas and are either sector leaders or near monopolies in their respective sectorsâ€, said Mr. Sikka.
DIPAM has appointed ICICI Securities Limited as the advisor for the FFO3.