The Central Government has raised over Rs 10,000 crore on a net basis from the 5th further fund offer(FFO) of the Central Public Sector Enterprises(CPSE) Exchange Traded Fund(ETF).
The government aims to raise Rs 1.05 lakh crore through disinvestment in 2019-20 up from Rs 85,000 crore raised last fiscal.Disinvestment is defined as the action of an organisation or government selling or liquidating an asset or subsidiary.
Government has constructed a fund to sell the shares in PSUs.It is called CPSE Exchange Traded Fund.The CPSE ETF is managed by Reliance Nippon Life Mutual Fund.
CPSE ETF comprises shares of the 11 public sector undertaking companies which are (a)ONGC (b)Coal India (c)IOC (d)Oil India (e)PFC (f)REC (g)Bharat Electronics (h)NTPC (I)SJVN (j)NLC and (k)NBCC.
Exchange Traded Funds(ETF) are index funds that are listed and traded on stock exchanges just like regular shares.They are a basket of stocks with assigned weights that reflect the composition of an index.
The ETFs trading value is based on the net asset value of the underlying stocks that it represents.The ETF is aimed at helping speed up the government’s disinvestment programme.