Believing an official statement it was seen that the ETF route is a safer mode of disinvestment as it shields investors against stock market volatility. The leg room for a follow-on fund offer would be around Rs 10,000 crore depending upon the current composition of the Bharat-22 ETF. Various state-owned companies or PSUs that are part of the new Bharat ETF-22 are ONGC, IOC, SBI, BPCL, Coal India and Nalco.

Bharat ETF-22 also includes various other central public sector enterprises on the list. Some of them are Bharat Electronics, Engineers India, NBCC, NTPC, NHPC, SJVNL, GAIL, PGCIL and NLC India. There are only three public sector banks in the Bharat-22 index. They are SBI, Indian Bank and Bank of Baroda. It was also informed that by using the ETF route, the government may dilute about 3.55 percent stake held in Coal India to comply with the minimum 25 percent public float requirement as mandated by market regulator SEBI.

It is being planned by the government to raise Rs 80,000 crore in the current fiscal from disinvestment, lower than over Rs 1 lakh crore raised last year. Before the launch of Bharat-22 ETF which has a diversified portfolio, the government had floated the CPSE ETF comprising stocks of 10 bluechip PSUs. Some of them are IOC, ONGC, Coal India, PFC, Bharat Electronics, REC, Container Corporation of India and Engineers India. The government had raised Rs 11,500 crore in three tranches, with Rs 3,000 crore from the first tranche in March 2014, Rs 6,000 crore from the second tranche in January 2017 and Rs 2,500 crore from the third tranche in March 2017.

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