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CPSE ETF NFO Opens on 18th March 2014

Published on Friday, March 14, 2014 by Dilip Davda | Modified on Wednesday, July 22, 2015

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The long waited CPSE (Central Public Sector Enterprise) ETF is now all set for soft launch next week. Goldman Sachs, who got the mandate from the Government of India for marketing of CPSE ETF, has announced the details of the NFO that is opening for subscription for Anchor Investment on 18.03.14 and for Non-Anchor investors from 19.03.14 to 21.03.14.

CPSE ETF is a unique opportunity for investors to invest in 10 Maharatnas, Navratnas and Miniratnas at a discount of 5% on the “Reference Market Price” of the underlying shares of CPSE Index, which will be offered to the CPSE ETF by the Government of India. 6.66% Loyalty Units (One Loyalty Unit will be allocated for every 15 Units held) for eligible Retail Individual Investors holding the units continuously from the Allotment Date to the Loyalty Unit Record Date, which will be one year from the NFO allotment date. The non-anchor investors NFO closes on 21st March 2014. Scheme reopens for continuous subscription and redemption on or before 11th April 2014.

Providing portfolio diversification through investment in blue-chip public sector enterprises, CPSE ETF is a play on India’s growth story through the largest companies in the core sector. The CPSE Index constituents are as follows: Oil & Natural Gas Corporation Ltd., GAIL (India) Ltd., Coal India Ltd., Rural Electrification Corporation Ltd., Oil India Ltd., Indian Oil Corporation Ltd., Power Finance Corporation Ltd., Container Corporation of India Ltd., Bharat Electronics Ltd. and Engineers India Ltd.

The CPSE Index is constructed in order to facilitate the Government of India’s initiative to disinvest some of its stake in selected CPSEs through the ETF route. As per data published by the index service provider, as of 13th March 2014, the CPSE index had a PE ratio of 10.52 and dividend yield of 3.51%.

Retail Individual Investors can invest a minimum of Rs. 5,000 and in multiples of Re. 1 thereafter up to Rs. 200,000. Non Institutional Investors/ QIBs can invest a minimum of Rs. 200,001 and in multiples of Re. 1 thereafter. Maximum Amount to be raised during the NFO will be Rs. 3,000 crore subject to maximum of 3% of the paid up share capital of each of the constituents of the CPSE Index. The entry and exit load is nil. CPSE ETF offers Tax Benefits as the Scheme is in compliance with the provisions of Rajiv Gandhi Equity Savings Scheme, 2013 (‘RGESS’).

Although it is observed that except Gold ETF, other ETF schemes have failed to attract retail investors, but this being the novel concept of a pack of leading listed PSU under ETF, it is felt that the retail investors will definitely stand to benefit with minimum of 9%+ tax free returns in first year and if loyalty bonus component is taken into consideration, then the return is above 15% which is definitely far better than tax free bonds, inflation index bonds or FDs. As this ETF consists 10 listed PSU scrip, it also spreads risk of holding in any single PSU and thus a safe bet one should not miss during NFO period. Thereafter it will be available for investment on bourses in secondary market.

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About Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda, a freelance journalist

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com


28 Comments

anil
28. anil  Apr 29, 2014 05:49 I Like It. | I Don't Like It. | Report Abuse Reply
hold or sell
Nilesh
27. Nilesh  Apr 10, 2014 18:51 I Like It. | I Don't Like It. | Report Abuse Reply
Is the refund for not allotted units out?
DURAISWAMY
26. DURAISWAMY  Apr 6, 2014 17:04 I Like It. | I Don't Like It. | Report Abuse Reply
Issue price is 17-45 . It listed on 4-4-2014. Closing price 19.35
Hari
25. Hari  Apr 4, 2014 21:13 I Like It. | I Don't Like It. | Report Abuse Reply
No discount offered to retailer I assume. Anybody having any idea abount discount to retailer.
Raj
24. Raj  Apr 4, 2014 17:31 I Like It. | I Don't Like It. | Report Abuse Reply
Issue price for all investor is 17.45? Why no separate discount to retail investors
ashok
23. ashok  Apr 4, 2014 14:27 I Like It. | I Don't Like It. | Report Abuse Reply
Issue price for retail investor is Rs 17.4504
manoj jain
22. manoj jain  Apr 4, 2014 12:17 I Like It. | I Don't Like It. | Report Abuse Reply
can anybody tell what is the issue price to retail investor and qib/nii , since they offered 5% discount to retail investor
jigaReligare
21. jigaReligare  Apr 4, 2014 11:22 I Like It. | I Don't Like It. | Report Abuse Reply
listined today
19 rs
huge profit
of 9%...............
Viral
20. Viral  Apr 3, 2014 13:48 I Like It. | I Don't Like It. | Report Abuse Reply
Dude... Chck the Demat... Allotment already done....
Anshul
19. Anshul  Apr 2, 2014 13:45 I Like It. | I Don't Like It. | Report Abuse Reply
Dude, the order status is under process. No units allotted, so no question of demat allocation!
punit
18. punit  Apr 2, 2014 13:33 I Like It. | I Don't Like It. | Report Abuse Reply
on icici just go to demat allocation and click on allocate , it wil reflect there..
Anshul
17. Anshul  Apr 2, 2014 13:21 I Like It. | I Don't Like It. | Report Abuse Reply
Allotment is still not reflecting on ICICI Direct where as some brokerages are showing the allotted units. Any idea where we can get the allotment status?
RK Rahul Kothari
16. RK Rahul Kothari  Apr 2, 2014 12:58 I Like It. | I Don't Like It. | Report Abuse Reply
yes really today rate around 20.00 maybe in 1 lakh application profit might be 15000.00 and which is listing date. today i listing that listing as on 4-4-2014
JIGARELIGARE
15. JIGARELIGARE  Apr 1, 2014 17:45 I Like It. | I Don't Like It. | Report Abuse Reply
There has been some criticism on that front but then the returns are comparable
or better than the benchmark indices," the finance ministry official said,
adding that investors have got return of 14.5% in just five days under the
scheme. "The allotment was made atRsRs17.45 per unit and the current price is
Rs20," he said



Read more at:
http://economictimes.indiatimes.com/articleshow/33046529.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
RAKESH
14. RAKESH  Apr 1, 2014 13:27 I Like It. | I Don't Like It. | Report Abuse Reply
Where to see allotment status? and do any body idea when it would be listed?
jpmd
13. jpmd  Apr 1, 2014 00:31 I Like It. | I Don't Like It. | Report Abuse Reply
allotment is out


khodidas
12. khodidas  Mar 21, 2014 19:29 I Like It. | I Don't Like It. | Report Abuse Reply
If anyone want form pls contact on facebook khodidas somaiya
Monty Garg
11. Monty Garg  Mar 20, 2014 09:19 I Like It. | I Don't Like It. | Report Abuse Reply
Hey, I am also on Axis Bank.
It was not showing in the morning but started to show in the evening, it is on second page on NFO
janak patel
10. janak patel  Mar 19, 2014 16:13 I Like It. | I Don't Like It. | Report Abuse Reply
It is under RGES without locking of 3 years. ? How it is possible ? This eill effect year 2013-14 or 2014-15 ? any body know please share.
janak patel
9. janak patel  Mar 19, 2014 16:11 I Like It. | I Don't Like It. | Report Abuse Reply
In AXIS BANK LTD. NFO is not shown so we are not able to apply on line in AXIS BANK LTD. Now please tell me how it is apply.
RK
8. RK  Mar 19, 2014 14:13 I Like It. | I Don't Like It. | Report Abuse Reply
in this nfo how many percentages listing gain?
Pranav Parekh
7. Pranav Parekh  Mar 19, 2014 13:55 I Like It. | I Don't Like It. | Report Abuse Reply
I cant get the forms.... please guide me how do i get the forms.
SHUBHAM AGARWAL
6. SHUBHAM AGARWAL  Mar 19, 2014 13:37 I Like It. | I Don't Like It. | Report Abuse Reply
HOW TO APPLY
vijay
5. vijay  Mar 19, 2014 12:24 I Like It. | I Don't Like It. | Report Abuse Reply
MAY I KNOW HOW TO BUY THIS PRODUCT
Zabihullah M Khan
4. Zabihullah M Khan  Mar 19, 2014 11:18 I Like It. | I Don't Like It. | Report Abuse Reply
for filling CPSE
khodidas
3. khodidas  Mar 18, 2014 20:07 I Like It. | I Don't Like It. | Report Abuse Reply
CPSE opens on 19 closes on 21 march
khodidas
2. khodidas  Mar 18, 2014 20:06 I Like It. | I Don't Like It. | Report Abuse Reply
Where ru from
hemant k jha
1. hemant k jha  Mar 17, 2014 16:31 I Like It. | I Don't Like It. | Report Abuse Reply
How to apply/




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