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CPSE ETF Review (FFO 4 - March 2019)

Published on Sunday, March 17, 2019 by Chittorgarh.com Team

CPSE ETF Review (FFO 4 - March 2019)
  • CPSE ETF (Central Public Sector Enterprises - Exchange Traded Fund) 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 4 is the 5th tranche of CPSE ETF since March 2014. FFO means Following Fund Offers.
  • CPSE ETF consists of 11 PSUs (that includes Maharatnas, Navratnas, Miniratnas and Sector Leaders.
  • Previous CPSE ETF currently trades around ₹25 giving a return of 8% plus since inception.
  • CPSE ETF FFO4 Base size is Rs 3500 crore and oversubscription if any will be kept as per sanction from Dipam department.
  • CPSE ETF FFO4 offers upfront discount of 4% to all categories.
  • All previous issues met with overwhelming response.

CPSE ETF FFO4 Public Issue

Issue OpenMarch 20, 2019
Issue CloseMarch 22, 2019

Nifty CPSE Index Portfolio Information

MethodologyPeriodic Capped Free Float
No. of Constituents11 Companies
Launch DateMarch 18, 2014
Base DateJanuary 01, 2009
Base Value1000
Calculation FrequencyOnline Daily
Index RebalancingQuarterly Weight Rebalancing

CPSE ETF Information

Type of SchemeOpen Ended Index Exchange Traded Scheme
Fund sizeRs 8,198.09 Cr (Monthly Average)
Dividend Yield5.52% (as of March 2019)
Exchange ListedNSE, BSE
NSE SymbolCPSEETF
BSE Code538057
ISININF457M01133
Entry LoadNil
Exit LoadNil
Exit LoadNil

ABOUT CPSE FFO 4

CPSE ETF is an open ended index exchange traded scheme designed disinvest of goverment of India's stack in 11 PSU Companies. CPSE ETF is managed by Reliance Nippon Life Asset Management Ltd through Reliance Mutual Fund business unit. Company has so far brought 4 tranches of CPSE ETF with maiden fund offer (NFO) in March 2014 and thereafter 3 successive Following Fund Offers (FFOs) in January 2017, March 2017 and Nov 2018 is now coming out with CPSE ETF FFO4.

FFO4 is an offer of units of Rs. 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 4 Allotment Price during the Further Fund Offer 4 ('FFO 4') 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.

Discount is 4% is offered on the FFO4 reference market price to underlying NIFTY CPSE Index shares.

CPSE FFO 4 Issue Details

The CPSE ETFs, through which the GoI (Government of India) intends to raise around Rs 3,500 crore, via its CPSE FFO4 (5th Tranche) is opening for investors in this week. Issue tenure details are as under:

For Anchor Investors – Opens on 19.03.19 and will close by the same eve.

For Others –Issue opens on 20.03.19 and will close on 22.03.19.

Allotment of CPSE ETFs will be made on the basis of reference market price of the underlying ETF shares discovered during the issue process. This issue offers upfront discount of 4% across all the categories of investors.

Minimum application amount for Retails investor is Rs. 5000 and in multiple of Re. 1 thereon, thereafter up to Rs. 200000. For HNI it is Rs. 200001 and in multiples of Re. 1 thereon thereafter and for others it is minimum Rs. 10 crore and in multiple of Re. 1 thereon, thereafter. This plan has no entry or exit load and will fall under Growth Plan.

Retail Individual Investor and Qualified Institutional Buyers (Retirement Funds) Portion: At least 70% (Seventy percent) of the Maximum Amount to be Raised (if any) as stated in Section III – Further Fund Offer 4 plus any under subscribed portion of Anchor Investor, shall be available for allocation to Retail Individual Investors and Qualified Institutional Buyers (Retirement Funds) on a proportionate basis in the manner set out in the Supplement to SID at the discretion of the AMC.

FFO 4 Units will rank pari-passu to the existing Units of the CPSE ETF.

Post allotment, units will be listed at BSE and NSE.

The CPSE ETF, which will be managed by Reliance Mutual Fund, has a concentrated portfolio spread across a few sectors i.e. energy, oil PSU, infrastructure & engineering and PSU financials. Top four holdings of the scheme — ONGC, Indian Oil, Coal India and NTPC — accounts for 77.7 per cent of the portfolio.

In terms of valuations, the Nifty CPSE Index trades at a PE (Price to Earnings) ratio of 8.43 compared to the Nifty 50 PE of 26.32. It offers a dividend yield of 5.52 compared to Nifty 50's 1.25 per cent based on current data.

CPSE ETF Subscription History

All the previous four CPSE ETF issues have received a good response from investors, with the fund house refunding extra subscriptions. The new fund offer of CPSE ETF was first launched in March 2014 in which the fund house mobilized Rs 4,363 crore. CPSE ETF's further fund offer (FFO) was launched in January 2017, where it collected Rs 13,705 crore, out of which the fund refunded Rs 7,705 crore due to the issue size limit of Rs 6,000 crore. CPSE ETF further fund offer (FFO 2) in March 2017 collected Rs 10,083 crore, out of which Rs 7,583 crore was refunded to investors due to the issue size limit of Rs 2,500 crore. CPSE ETF further fund offer (FFO 3) was launched in November 2018 and collected Rs 31,203 crore, out of which Rs 14,203 crore was refunded to investors due to limited issue size of Rs 17,000 crore. So far the biggest transaction on sale of CPSE ETF took place in November 2018.

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 NFO, FFO & FFO 2 received overwhelming response as its collection was ₹4,363 Crs, ₹13,705 Crs and ₹10,083 Crs respectively, out of which ₹1,363 Crs, ₹7,705 and ₹7,583 Crs respectively was refunded to investors due to the limited issue size of ₹3,000, ₹6000 Crs and ₹2,500 Crs respectively. This time for CPSE ETF FFO3 the base limit is ₹8000 cr. and the Fund has permission to keep oversubscription up to 75% of the base size i.e. ₹6000 cr. thus making the overall fund offer of ₹14000 cr. All these ETFs are listed on BSE and NSE.

CPSE ETF Product Label

As of 17th March 2019 composition of CPSE ETF is as under:

CPSE Composition

No.

Company Name

Industry

Weightage %

1

Oil & Natural Gas Corporation Ltd.

Oil

20.43%

2

NTPC Ltd.

Power

19.54%

3

Coal India Ltd.

Minerals/Mining

19.09%

4

Indian Oil Corporation Ltd.

Petroleum Products

18.64%

5

REC Ltd.

Finance

6.72%

6

Power Finance Corporation Ltd.

Finance

6.13%

7

Bharat Electronics Ltd.

Industrial Capital Goods

4.06%

8

Oil India Ltd.

Oil

2.84%

9

NBCC (India) Ltd.

Construction

1.46%

10

NLC INDIA Ltd.

Power

0.63%

CONCLUSION:

Investors looking for safe long term investment may consider investment in this issue. (Subscribe for long term).

CPSE Allotment Status (FFO 4)

Allotment price of CPSE ETF FFO4 is set at Rs 25.4840. Retail investors who has applied for Rs 2L shares recieved 7848 units.

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User Comment

avatar
51. Adesh jain  Sunday, March 17, 2019 Reply
Units can be sold today, even if they come to your demat account by tuesday 11am.
However they should hit our accounts by evening today
avatar
50. K MODI  Sunday, March 17, 2019 Reply
I GOT MSG OF REL MUTUAL FUND THAT AMOUNT YOUR DP:XXXX 0 IS ALOTED WITH 7848 UNIT BUT MY DP NO. NOT END WITH 0 IT END WITH 5 .. ANY ONE HAVE ANY IDEA ABOUT IT
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50.1. Aasif  Sunday, March 17, 2019
Yes I have 5 account and total 3 account last demet ac no not matched
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49. ANANDA PRAJAPATI  Sunday, March 17, 2019 Reply
CPSE LINK PLEASE
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48. Punit  Sunday, March 17, 2019 Reply
I got allotment message, but how to sell know or hold
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47. Basanta  Sunday, March 17, 2019 Reply
Shall we need to pay brokerage if we sell the CPSE ETF new shares going to be alloted today.
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46. Jignesh  Sunday, March 17, 2019 Reply
When Allotment Will done and received units in Demat Account.....
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45. Ramkishan somani  Sunday, March 17, 2019 Reply
Neft credit of rs 1.57 received in bank account for application of rs 200000/
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44. VIRAL SHAH  Sunday, March 17, 2019 Reply
HNI ALLOTEMENT RATIO
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43. nimesh  Sunday, March 17, 2019 Reply
allotment done
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42. Dipak Gosaliya  Sunday, March 17, 2019 Reply
Pls send me allotment link
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42.3. arpit gupta  Sunday, March 17, 2019
sir, units not showing in demat.How to sell now?
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42.4. KAMMA SIVA RAMA KRISHNA  Sunday, March 17, 2019
Kindly inform whether any one got credited the units.
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41. ashish  Sunday, March 17, 2019 Reply
any allotment message?
allotment price?
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41.1. Vansh  Sunday, March 17, 2019
CPSE ETF FFO 4 allotment price is Rs.25.4840
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40. Priyansh Agrawal  Sunday, March 17, 2019 Reply
Any source link
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39. nitin patel  Sunday, March 17, 2019 Reply
what is amount alloted this etf?
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38. Sunil  Sunday, March 17, 2019 Reply
100% allotment to retailers @ 25.34
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38.1. Palash pramanik  Sunday, March 17, 2019
Allotment statues
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38.2. Rekha Sanghsvi  Sunday, March 17, 2019
Allotment status Rs 100000
Allotment date
Listing date

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37. Nav  Sunday, March 17, 2019 Reply
I think allotment will be done tomorrow.
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36. Mukesh  Sunday, March 17, 2019 Reply
Allotment done
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35. Vishva  Sunday, March 17, 2019 Reply
When I apply my dp I'd & do they show no data found
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33. Vishva  Sunday, March 17, 2019 Reply
Please send allotment link
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32. VINOD VD  Sunday, March 17, 2019 Reply
29/03/2019 friday allotment in demat a/c
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31. AJAY SHARMA  Sunday, March 17, 2019 Reply
WHEN SHARE WILL CREDITED IN DEMAT ACCOUNT IN RETAIL SEGMENT. WHERE I CAN CHECK THE ALLOTMET
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30. SUSHIL  Sunday, March 17, 2019 Reply
GREY MARKET PRICE
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29. Dhruvil Vadaliya  Sunday, March 17, 2019 Reply
Current gray marke premium
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28. ganga kr  Sunday, March 17, 2019 Reply
listing date is 1st April
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27. Rushil  Sunday, March 17, 2019 Reply
What is current Grey Market Price?
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26. Basanta  Sunday, March 17, 2019 Reply
All the dates on the post (Messages) is showing as "March 17th 2019"
I am 100 % sure some thing wrong here .. Administrator Please fix this
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26.1. naresh  Sunday, March 17, 2019
7895 unite will get
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26.2. NAVIN  Sunday, March 17, 2019
29 MARCH ALLOTMENT DATE AND 1 APRIL IS LISTING DATE.GRAY MARKET PRICE IS 11000/-
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25. IPO  Sunday, March 17, 2019 Reply
Any update on allotment rate and today's gray market rate.
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24. Karnav Zaveri  Sunday, March 17, 2019 Reply
What is the listing date, allotment price ?
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23. Rilav Thakkar  Sunday, March 17, 2019 Reply
Units apne accounts me kab aayenge?
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23.1. imran khan  Sunday, March 17, 2019
one day before listing day
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23.2. NAVIN  Sunday, March 17, 2019
Thursday or Friday ko mila ga dp acount mai and friday or monday ko listing
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22. Archit  Sunday, March 17, 2019 Reply
Today gray market price 11000/- in ahmedabad
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21. Maulik Shah  Sunday, March 17, 2019 Reply
Kitna Benifit ho sakta he. Listing gain kitna mil sakta he 2 Lakhs ki application par.
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21.3. Pradip Modi  Sunday, March 17, 2019
Really we get 16000
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21.4. Vishal  Sunday, March 17, 2019
Next 4 days CPSE k performance pe depend karta hai... Allotment would be approx @ 25.33
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20. Ritesh Shah  Sunday, March 17, 2019 Reply
Will get good return in CPSE ETF like every timr
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19. Jkb  Sunday, March 17, 2019 Reply
What is listing price and date please
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18. Shweta  Sunday, March 17, 2019 Reply
It is a good investment option for long term since the expense ratio is very as compared with other fund. Moreover it contains top rated public sector companies. It is good in long term.
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17. Vijay Agrawal  Sunday, March 17, 2019 Reply
9600 in Ahmedabad
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16. patel  Sunday, March 17, 2019 Reply
anchor subscription figure ???
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16.1. NAVIN  Sunday, March 17, 2019
The anchor book of the fourth follow-on Central Public Sector Enterprises Exchange-Traded Fund (CPSE ETF), managed by Reliance MF was subscribed by 5.78 times against the anchor base issue size of ₹1,050 crore

https://www.thehindubusinessline.com/markets/anchor-book-of-cpse-etf-subscribed-5-times/article26582141.ece
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16.2. NAVIN  Sunday, March 17, 2019
Current Figures-
1.55 L apps, Retail Approx 2.5K cr, Retirement 1.5K cr, Others 18K.

Final figures still awaited
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15. NAVIN  Sunday, March 17, 2019 Reply
ALLOTMENT PRICE AND LISTING DATE.and gray mkt price
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14. Hanuman Paliwal  Sunday, March 17, 2019 Reply
What is the listing date of Cpse etf??
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13. Subhash  Sunday, March 17, 2019 Reply
Any one have details of subscription
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12. HK  Sunday, March 17, 2019 Reply
What will be allotment price after discount? What will chance to get profit?
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11. Nitesh Bhatia  Sunday, March 17, 2019 Reply
3100 grey market rs. On two lakh
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10. B.r.  Sunday, March 17, 2019 Reply
Final subscription details???
If any body knows link to see the subscription hen please send
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10.1. Umesh  Sunday, March 17, 2019
Confirm allotment hai 10000 govt ne retain Kiya hai
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9. Dhruvil Vadaliya  Sunday, March 17, 2019 Reply
Grey market premium plz
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8. Piyu  Sunday, March 17, 2019 Reply
Already down 3% on 21/3.... If today also it falls 3% .. Does it becomes a buy with 4% discount ?
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7. JATIN  Sunday, March 17, 2019 Reply
Listing date approx.?
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6. Sagar Sodha  Sunday, March 17, 2019 Reply
Hi guys,
I think market is overbought and CPSE etf is also at it's pick.
My advice is to not suscribe.
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5. Rkg  Sunday, March 17, 2019 Reply
Top Contributor Top Contributor (200+ Posts)
Somebody pl. Give me link for online application.
Reliance MF site doesnot take to nsdl dp/CID etc
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4. RAKESH  Sunday, March 17, 2019 Reply
Somebody pl. Give me the link to apply online as I am away from home and on Reliance MF site it doesnot lead to DP/CID etc.
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3. ashish  Sunday, March 17, 2019 Reply
what is the probability of making profit in this issue for retail?
any grey price in mkt?
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3.1. Ankur Goel  Sunday, March 17, 2019
Probability very low as market is already high. You will get allotment on high price. To get profit from this market should make low during subscription will open and make high again after closing of subscription.
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3.2. Accurate  Sunday, March 17, 2019
Rs. 3500 for Rs. 2 Lakh application
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2. Dpkdewani  Sunday, March 17, 2019 Reply
Will there be listing gains in this ffo



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