Unlimited Trading @ Rs 899 per month - Prostocks

CPSE ETF FFO 6 Review (31st January 2020)

Published on Tuesday, January 21, 2020 by Chittorgarh.com Team

Best Online Trading Account

We can help you find the right broker and save upto 90% in brokerage fees.

NamePhone
EmailCity
State
Are you a day trader?
CPSE ETF FFO 6 Review (31st January 2020)

Nippon India Mutual Fund is coming up with 6th FFO of CPSE ETF. The fund invests in the NIFTY CPSE Index Stocks. This includes 10 PSU companies selected based on established track record, government holding, market capitalization, dividend history, sector representation, etc.

Note: FFO means Following Fund Offers. The fund was launch on March 18, 2014. CPSE means Central Public Sector Enterprises and ETF is Exchange Traded Funds.

CESE ETF Key Highlights

  • CPSE ETF is an open ended index exchange traded scheme. It tracks the performance of Nifty CPSE Index.
  • CPSE ETF is desiged to facilitate Government of India's initiative to disinvest some of its stake.
  • CPSE ETF FFO 6 is the 7th tranche of CPSE ETF since March 2014.
  • CPSE ETF consists of 10 PSUs.
  • CPSE ETF FFO6 Base size is ₹10,000 cr with green shoe options of additional 8000 cr crore (Total 18,000 Cr).
  • CPSE ETF FFO6 offers upfront discount of 3% to all categories.
  • All previous issues met with overwhelming response.

Offer Documents

CPSE ETF FFO6 Public Issue Detail

Scheme Features

For Anchor Investors

For Non Anchor Investors

FFO 6 Opens on

30th January, 2020

31st January, 2020

FFO 6 Closes on

30th January, 2020

31st January, 2020

Benchmark Index

Nifty CPSE TRI

Pricing

1/100th of Nifty CPSE Index

Entry & Exit Load

NIL

Category of Investors# (during FFO 6)

  • Retail Individual Investor
  • Qualified Institutional Buyers or QIB
  • Non Institutional Investors
  • Anchor Investors

Minimum application amount @ (during FFO 6)

Retail Individual Investor:

Minimum amount of ₹5,000 and in multiples of ₹1 thereafter

Non Institutional Investors / QIB

Minimum amount of ₹2,00,001 and in multiples of ₹1 thereafter

For Anchor Investor:

Minimum amount of ₹10 Crores and in multiples of ₹1 thereafter

Minimum application amount (during ongoing offer period) (Ongoing Offer commenced on April 04, 2014)

Directly with the Mutual Fund:

Create / Redeem in exchange of Portfolio Deposit and cash component in Creation Unit Size of 1 lakh units of the Scheme.

On the Exchange:

1 (one) Unit and in multiples thereof.

Plans

Growth

Listing

[.]

Maximum Amount to be Raised during FFO 6^

"Initial Amount" of ₹18,000 crores plus

Discount Offered by GOI**

Discount of 3% on the "FFO 6 Reference Market Price" of the underlying shares of Nifty CPSE Index shall be offered to FFO 6 by GOI.


CPSE ETF Subscription History

CPSE

Month

Amt proposed (₹ Cr)

Bids Received (₹ Cr)

Refund Amt (₹ Cr)

NFO 2014

March

3000.00

4363.00

1363.00

FFO1 2017

Jan

6000.00

13705.00

7705.00

FFO2 2017

March

2500.00

10083.00

7583.00

FFO3 2018

Nov.

17000.00

31203.00

14203.00

FFO4 2019

March

10000.00

30464.00

20464.00

Thus one can see that every time issue got overwhelming response and fund had to refund.

On returns aspect too CPSE gave better returns in medium to long term. Particularly last to CPSEs rewarded as under:

  • CPSE FFO 3 gave return of 27.85% v/s 11% in Nifty
  • CPSE FFO 4 gave return of 11.97%v/s 2% in Nifty

ISSUE DETAILS

CPSE FFO6 offer is opening on 30thJanuary, 2020 (only for a day) for Anchor investors and on 31thJanuary, 2020 for other categories i.e. HNIs and Retail. Minimum investment is to be made for ₹5000 and in multiples of ₹1 thereon, thereafter. Maximum investment by retail investor is ₹2 lakh.

Since this is a mutual fund scheme, cheque is to be given along with the application on the opening day of the issue by respective categories of investors.

This time the base size is ₹10000 cr. but fund may keep the total subscription up to ₹18000 cr. post permission from the DIPAM.

All categories of investors are eligible for a 3% discount on the final price arrived at for the allotment. Anchor portion is 30% and non-anchor (i.e. other than Anchor) portion is 70% of the total issue size. CPSE is last quoted at ₹21.65 per unit on NSE (as on 28.01.20)

This CPSE basket includes Bharat Electronics Ltd., Coal India Ltd., NBCC (India) Ltd., NLC India Ltd. NTPC Ltd., Oil India Ltd., Oil & Natural Gas Corporation Ltd., SJVN Ltd., Cochin Shipyard Ltd., NHPC Ltd., NMDC Ltd. and Power Grid Corporation of India Ltd.



CPSE ETF Calendar Year Returns

YEAR

CPSE ETF

NIFTY 50 TRI

2014*

44.1%

24.9%

2015

-14.3%

-3.0%

2016

17.4%

4.4%

2017

19.4%

30.4%

2018

-18.9%

4.6%

2019**

16.6%

9.2%

* Returns from CPSE ETF inception date i.e. 28.03.2014

** Data ended 28.06.2019. (source: MFI)


CPSE Public Issue Historic Return

Name

Size (₹ Cr)

Discount

Listing Date

Listing Day - Max Gain*

10 Days Holding Gain*

20 Days Holding Gain*

30 Days Holding Gain*

CPSE ETF

3000

5%

4th Apr 2014

₹17500

₹19800

₹25190

₹24750

CPSE ETF FF0 1

6000

5%

30th Jan 2017

₹22090

₹23280

₹23120

₹24160

CPSE ETF FFO 2

2500

3.50%

27th Mar 2017

₹7420

₹8630

₹16450

₹16670

CPSE ETF FFO 3

8000

4.50%

10th Dec 2013

₹740

₹18660

₹20270

₹17760

CPSE ETF FF04

10000

4%

1st April 2019

₹13070

₹13540

₹14250

₹16520

Bharat 22 FFO Historic Return

Name

Size (₹ Cr)

Discount

Listing Date

Listing Day - Max Gain*

10 Days Holding Gain*

20 Days Holding Gain*

30 Days Holding Gain*

Bharat 22 ETF

8000

3%

28th Nov 2017

₹7950

₹4060

₹7450

₹11730

Bharat 22 ETF FFO 1

8400

2.50%

2nd July 2018

(₹960)

₹3067

₹2290

₹11810

Bharat 22 ETF FF0 2

3500

5%

25th Feb 2019

₹15740

₹28114

₹33770

₹39210

*All returns on the bask of 200000 Application


NIFTY CPSE Index

NIFTY CPSE Index has been constructed to facilitate Government of India's initiative to disinvest some of its stake in Central Public Sector Enterprises (CPSEs) through ETF route. The index comprises of select 10 CPSEs. The index has a base date of Jan 01, 2009 and base value of 1000.

Nifty CPSE Index Portfolio Information

Methodology Periodic Capped Free Float
No. of Constituents 10 Companies
Launch Date March 18, 2014
Base Date January 01, 2009
Base Value 1000
Calculation Frequency Online Daily
Index Rebalancing Quarterly Weight Rebalancing

As of December 31, 2019 composition of CPSE ETF is as under:

CPSE Composition

No.

Company Name

Industry

Weightage %

1

Coal India Ltd.

Minerals/Mining

20.86%

2

NTPC Ltd.

Power

20.28%

3

Oil & Natural Gas Corporation Ltd.

Oil

19.91%

4

Indian Oil Corporation Ltd.

Petroleum Products

18.81%

5

Power Finance Corporation Ltd.

Finance

8.07%

6

Bharat Electronics Ltd.

Industrial Capital Goods

6.32%

7

Oil India Ltd.

Oil

3.03%

8

NBCC (India) Ltd.

Construction

1.26%

9

NLC INDIA Ltd.

Power

0.75%

10

SJVN Ltd.

Finance

0.71%

CPSE ETF Information

Type of Scheme Open Ended Index Exchange Traded Scheme
Fund size ₹8,198.09 Cr (Monthly Average)
Dividend Yield 5.52% (as of March 2019)
Exchange Listed NSE, BSE
NSE Symbol CPSEETF
BSE Code 538057
ISIN INF457M01133
Entry Load Nil
Exit Load Nil
Exit Load Nil

ABOUT CPSE FFO 6

CPSE ETF is an open-ended index exchange-traded scheme designed disinvest of government of India's stack in 10 PSU Companies. CPSE ETF is managed by Nippon India Mutual Fund. Company has so far brought 5 tranches of CPSE ETF with maiden fund offer (NFO) in March 2014 and thereafter 4 successive Following Fund Offers (FFOs) in January 2017, March 2017, Nov 2018 and July 2018 is now coming out with CPSE ETF FFO6.

Offer of Units of ₹10 each (i.e. face value) for cash (on allotment, the value of each Unit would be approximately 1/100th of the value of Nifty CPSE Index) to be issued at a premium, if any, approximately equal to the difference between face value and FFO 6 Allotment Price during the Further Fund Offer 6 (FFO 6) and at NAV based prices thereafter. For the existing CPSE ETF, the Ongoing Offer Period for the Scheme commenced on April 04, 2014. CPSE ETF is an open-ended index scheme listed on the Exchange in the form of an Exchange Traded Fund (ETF), which tracks the Nifty CPSE Index.

CPSE ETF Scheme

CPSE ETF is a passive investment fund that was created to help the government in its disinvestment program of divesting stake in select Central Public Sector Enterprises (CPSE) through Exchange Traded Funds (ETF). The fund invests in the Nifty CPSE Index stocks - that includes eleven PSU companies (Maharatnas, Navratnas, Miniratnas, Sector Leaders) selected on the basis of established track record, government holding, market capitalization, dividend history, sector representation, etc. - in the same proportion and weightage as of the index.

The investment objective of the Scheme is to provide returns that, before expenses, closely correspond to the total returns of the Securities as represented by the Nifty CPSE Index, by investing in the Securities which are constituents of the Nifty CPSE Index in the same proportion as in the Index. However, the performance of the Scheme may differ from that of underlying index due to tracking error. There can be no assurance or guarantee that the investment objective of the Scheme would be achieved.

CPSE ETF Product Label

History of CPSE ETF Public Offer

New Fund Offer (NFO)

  • NFO was first launched in March 2014
  • NFO received overwhelming response; NFO collection was ₹4,363 Crs, out of which ₹1,363 Crs was refund to investors due to limited issue size of ₹3,000 Crs
  • Participation across various categories of investors
  • Units of CPSE ETF were listed on 04th April 2014 on NSE & BSE

Further Fund Offer (FFO)

  • FFO was launched in January 2017
  • FFO received overwhelming response; FFO collection was ₹13,705 crs, out of which ₹7,705 crs was refund to investors due to limited issue size of ₹6,000 Crs
  • Participation across various categories of investors
  • FFO Units of CPSE ETF were listed on 31st January 2017 on NSE & BSE

Further Fund Offer 2 (FFO 2)

  • FFO 2 was launched in March 2017
  • FFO 2 received overwhelming response; FFO 2 collection was ₹10,083 crs, out of which ₹7,583 crs was refund to investors due to the issue size limit of ₹2,500 crs.
  • Participation across various categories of investors
  • Units of CPSE ETF were listed on 28th March 2017 on NSE & BSE

Further Fund Offer 3 (FFO 3)

  • FFO 3 was launched in November 2018
  • FFO 3 received overwhelming response; FFO 3 collection was ₹31,203 crs, out of which ₹14,203 crs was refund to investors due to the issue size limit of ₹17,000 crs.
  • Participation across various categories of investors
  • Units of CPSE ETF were listed on 10th December 2018 on NSE & BSE

Further Fund Offer 4 (FFO 4)

  • FFO 4 was launched in March 2019
  • FFO 4 received overwhelming response; FFO 4 collection was ₹30,464 crs, out of which ₹20,464 crs was refund to investors due to the issue size limit of ₹10,000 crs.
  • Participation across various categories of investors
  • Units of CPSE ETF were listed on 1st April 2019 on NSE & BSE

Further Fund Offer 5 (FFO 5)

  • FFO 5 was launched in July 2019
  • „
  • FFO 5 was initially launched with an issue size of ₹8,000 Crs, but due to an overwhelming response across various categories the issue size was scaled up to ₹11,500 Crs
  • FFO 5 collection was ₹48,485 Crs, out of which ₹36,985 Crs has been refunded to investors
  • „
  • FFO 5 Units of CPSE ETF were listed on 29th July 2019 on NSE & BSE

Further Fund Offer 6 (FFO 6) Investment Rationale

  • Play on India growth story through investment in the large CPSE stocks at relatively better valuations compared to other broader indices.
  • Portfolio diversification through investment in blue-chip Maharatna, Navaratna & Miniratna CPSE stocks majority of which are which are sector leaders / near monopolies.
  • FFO 6 price advantage - Discount to all categories of investors.
  • Valuation and Dividend Yields: Reasonable P/E ratio and dividend yields compared to broader market index.
  • Relatively lower correlation of 0.62 & 0.67 for Nifty CPSE Index vis-à-vis Nifty 50 index (over 1 Year & 5 Years period ending 31st December, 2019), helping portfolio diversification. (Source: NSE)
  • Flexibility of trading on real time basis.
  • Low expense ratio i.e. 0.0095%.
  • Investors will be able to diversify exposure across a number of Public Sector companies through a single investment.

CONCLUSION

Based on CPSE ETF rewards to investors for all previous floats, investment in this CPSE FFO6 is recommended for medium to long term rewards.


Rate this article
32
3.8
Rating:Rated 3.8 stars

Vote Here ...

Save 60% to 90% on Brokerage Fee

We can help you save over 60% in brokerage fee.

Name:Phone
EmailCity
State
Are you a day trader?

22 Comments

Pramod Singh
22. Pramod Singh  Feb 17, 2020 15:45 I Like It. 2 | I Don't Like It. | Report Abuse Reply
I didn't applied for this CPSE ETF FFO 6, peoples whoever applied got allotted on price 20.21, but CMP is 19.54, so getting another 3.3% additional discount.
investormahesh
22.1. investormahesh  Feb 18, 2020 00:33 I Like It. 1 | I Don't Like It. | Report Abuse
I guess those who applied in ffo 3, 4 and 5 may also be in loss if held till date
Sonal patel
21. Sonal patel  Jan 27, 2020 19:25 I Like It. 3 | I Don't Like It. 23 | Report Abuse Reply
Discount is 3 %
SDK
21.3. SDK  Feb 5, 2020 16:27 I Like It. 9 | I Don't Like It. | Report Abuse
@ARJUN , ALLOTMENT WOULD BE SLIGHT BELOW 20.30 PRICE
aadedhad
21.4. aadedhad  Feb 10, 2020 09:12 I Like It. 3 | I Don't Like It. | Report Abuse
S.P also post like aniketiaf.always wrong info.
MRANKUR
20. MRANKUR  Feb 7, 2020 13:56 I Like It. | I Don't Like It. | Report Abuse Reply
why i get my money back, i apply at nippon website fill zerodha cdsl number
investormahesh
20.1. investormahesh  Feb 8, 2020 22:43 I Like It. | I Don't Like It. | Report Abuse
To Ankur brother first u stated that your money has been returned then u stated that u have got allotment
patience & passion
19. patience & passion  Feb 6, 2020 17:50 I Like It. 4 | I Don't Like It. | Report Abuse Reply
allotment of CPSE ETF FFO 6 will happen within 5 working days NFO closure.
so allotmemt will be on friday
Allotmemt price 20.79
3% discount 20.79 -.06237= 20.1663.
200000/20.1663=9917 quantity
MRANKUR
19.5. MRANKUR  Feb 8, 2020 11:56 I Like It. | I Don't Like It. | Report Abuse
ryt......... allotment price 20.2161 544 units done
investormahesh
19.6. investormahesh  Feb 8, 2020 21:17 I Like It. | I Don't Like It. | Report Abuse
To Ankur brother first u stated that your money has been returned
aadedhad
18. aadedhad  Feb 7, 2020 15:31 I Like It. 8 | I Don't Like It. | Report Abuse Reply
allotment done @ 20.2161 , CMP 20.85
https://investeasy.nipponindiamf.com/online/transaction/cpseauth
Zabihullah M Khan
17. Zabihullah M Khan  Feb 6, 2020 16:21 I Like It. | I Don't Like It. | Report Abuse Reply
Inform allotment date
investormahesh
16. investormahesh  Jan 30, 2020 13:11 I Like It. 4 | I Don't Like It. | Report Abuse Reply
Almost all the persons who invested in CPSE ETF in last 3 years are in loss as per today's price. Most of the persons who invested in last 5 years are in loss.
investormahesh
16.6. investormahesh  Jan 31, 2020 08:51 I Like It. 1 | I Don't Like It. | Report Abuse
To Ankur brother at Nippon AMC website select option guest log in
MRANKUR
16.7. MRANKUR  Feb 4, 2020 12:48 I Like It. 1 | I Don't Like It. | Report Abuse
thank u bro, i apply from nippon amc website as there is no option in axis bank ipo website
Sanjay
15. Sanjay  Feb 3, 2020 14:09 I Like It. | I Don't Like It. | Report Abuse Reply
CPSE ETF Kitene Time K Liye Hold Kar sakte he.plz Suggested.
Rama
14. Rama  Feb 3, 2020 06:48 I Like It. 3 | I Don't Like It. | Report Abuse Reply
FRAUD IPO
CHEATING MONEY OF THE PEOPLE.
ONLY LOSS
NO GAIN.
DON'T INVEST.
Rama
13. Rama  Feb 3, 2020 06:44 I Like It. 3 | I Don't Like It. | Report Abuse Reply
Waste investment. Money losing investment.
Rahul Popat
12. Rahul Popat  Jan 31, 2020 12:51 I Like It. 1 | I Don't Like It. | Report Abuse Reply
This etf come in every six month.

All PSU stock at cheaper price but in last offer also cheaper


This etf offer come in every 6 month with the discount.

This etf will give chance to exit at cost for minor profit in past but if fail then........😭😭😭😭
Rahul Popat
11. Rahul Popat  Jan 31, 2020 12:46 I Like It. 1 | I Don't Like It. | Report Abuse Reply
Review

Listing - Avoid
Short term - Avoid
Long term - Avoid
Rahul Popat
10. Rahul Popat  Jan 31, 2020 12:40 I Like It. 3 | I Don't Like It. | Report Abuse Reply
Dear Admin,

Please mention correct weight or stocks...and add etf 5's negative return
Simon
9. Simon  Jan 22, 2020 22:50 I Like It. 11 | I Don't Like It. 1 | Report Abuse Reply
What benefits hold cpse etf 5
raibahadur
9.1. raibahadur  Jan 23, 2020 22:04 I Like It. 12 | I Don't Like It. 1 | Report Abuse
Only for loss
Rahul Popat
9.2. Rahul Popat  Jan 31, 2020 12:38 I Like It. 1 | I Don't Like It. | Report Abuse
Huge losses

Most of 25k loss if any one hold till...per 2lakh application

I think this is not good....if in every six month cpse etf ofs come
sangargms
8. sangargms  Jan 29, 2020 18:15 I Like It. 4 | I Don't Like It. | Report Abuse Reply
Can someone please explain how dividend given by constituent companies finally comes to investors of ETF? I have both CPSE and Bharat 22 ETF and never received any communication on dividend. I don't think any additional units were ever allocated in lieu of dividend.
Sandeep
8.2. Sandeep  Jan 30, 2020 13:01 I Like It. | I Don't Like It. | Report Abuse
Thanks for replying. As given in above article, dividend yield is 5.52%. And administration cost is negligible. I don't think it makes any sense that dividend received on units held by me is used to pay for redemptions of others (ultimately I hold shares of constituent companies via the ETF). ETF can sell shares in open market for the redemptions (net of purchase and selling of units).
Prashant
8.3. Prashant  Jan 31, 2020 08:49 I Like It. 3 | I Don't Like It. | Report Abuse
Dividends drive an increase in the NAV of the ETF.
MRANKUR
7. MRANKUR  Jan 30, 2020 20:04 I Like It. | I Don't Like It. | Report Abuse Reply
can i apply from axis net banking ? by filling zerodha cdsl number

like we fill other demat number in net banking
MRANKUR
6. MRANKUR  Jan 30, 2020 19:57 I Like It. | I Don't Like It. | Report Abuse Reply
can i apply from axis net banking ? by filling zerodha cdsl number
MRANKUR
5. MRANKUR  Jan 29, 2020 18:57 I Like It. | I Don't Like It. 1 | Report Abuse Reply
can i apply from axis net banking ?
Vipul Goel
4. Vipul Goel  Jan 25, 2020 13:43 I Like It. 7 | I Don't Like It. | Report Abuse Reply
I think that the constituents of CPSE ETF have changed, to exclude IOC and PFC, include NHPC, Cochin Shipyard, NMDC. Pl advise , what will be the weightage etc
Nk Parwal
4.1. Nk Parwal  Jan 25, 2020 17:59 I Like It. 7 | I Don't Like It. | Report Abuse
Power grid also included from 23rd January 2020
Luck
3. Luck  Jan 24, 2020 14:48 I Like It. 10 | I Don't Like It. | Report Abuse Reply
Last time apply kiya tha sab fas gaye he
Dont apply in wortst thing.
Sonal patel
2. Sonal patel  Jan 23, 2020 19:14 I Like It. 2 | I Don't Like It. 8 | Report Abuse Reply
Wait for discount...
Kamlesh
1. Kamlesh  Jan 22, 2020 18:43 I Like It. 1 | I Don't Like It. 7 | Report Abuse Reply
Kostak 2300




Message Board

Stock Message Board



Search Chittorgarh.com:

Chittorgarh.com Mobile Apps:

Download Android App Downlaod iOS App