The anchor investor portion amounting to Rs. 900 crore of CPSE ETF, an open-ended Index Exchange Traded Scheme New Fund Offer will open on 18th March 2014. The CPSE ETF offer sized at RFs. 3000 crore is the single largest public offer in FY2014. Qualified Institutional Buyers, who want to apply as Anchor Investors, can invest in the Scheme with a minimum investment amount of Rs. 10 crore and in multiples of Re. 1/- (Rupee One) thereafter.
Anchor Investors shall pay a margin of at least 25% (Twenty Five percent) of the Subscription amount during the Anchor Investor NFO period, with the balance to be paid on or before the closure of the Non Anchor Investor NFO Period. If the Anchor Investor does not pay the balance amount before the closure of the Non Anchor Investor NFO Period, then the margin amount paid by the Anchor Investor shall be forfeited and credited to the Scheme. The Anchor Investor will not be able to withdraw / modify its application once submitted to the AMC. Please note that any Units allotted to Anchor Investors during the NFO period shall be locked-in for a period of 30 days from the Allotment Date.
The portion not exceeding 30% (Thirty percent) of the Maximum Amount to be Raised as stated in the Section III – New Fund Offer of this SID, shall be available for allocation to Anchor Investors on a proportionate basis.
In case of under-Subscription in this category, the under subscribed portion will be available for spill-over from the Non Anchor Investor Portion at the discretion of the AMC. But any under-Subscription in the Non Anchor Investor Portion will not be allowed to be met by any spill-over from the Anchor Investor Portion.
During the Ongoing Offer Period investors can invest directly with the Mutual Fund - The Investors can create / Redeem in exchange of Portfolio Deposit and Cash Component in Creation Unit Size of the Scheme. They can also invest on the Exchange – The minimum number of Units that can be bought or sold by the Investors on the Exchange is 1 (one) Unit and in multiples thereof.
NFO opens on 19th March 2014 for non-anchor investors. Managed by Goldman Sachs Asset Management (India) Pvt. Ltd., CPSE ETF is an open ended scheme to be listed on the Exchanges in the form of an Exchange Traded Fund (“ETF”), which tracks the central public sector enterprises (“CPSE”) Index.
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”1 of the underlying shares ofCPSE Index, which will be offered to the CPSE ETF by the Government of India (“GOI”). 6.66% Loyalty Units (One Loyalty Unit will be allocated for every 15 Units held) for eligible Retail Individual Investors2 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. TheCPSE 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 theCPSE 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’).
Product Label – CPSE ETF
This product is suitable for investors who are seeking*:
• long-term capital appreciation.
• investment in securities covered by CPSE Index.
• high risk. (BROWN)
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
Note: Risk may be represented as:
(BLUE) investors understand that their principal will be at low risk (YELLOW) investors understand that their principal will be at medium risk (BROWN) investors understand that their principal will be at high risk
1 Price determined based on the average of full day volume weighted average price on the NSE during the Non Anchor Investor NFO Period (inclusive of Non Anchor Investor NFO Period open as well as close date) for each of the index constituents of the CPSE Index.
2 Eligibility Criteria:
a. The Units must have been held as per the records of Registrar in the name of the same Unit holder continuously from the NFO Allotment Date to the Loyalty Unit Record Date
b. For calculation of the Loyalty Units, the lowest Unit balance held by the Unit holder at any point of time in between the NFO Allotment Date to the Loyalty Unit Record Date (both days included), which is at par or below the number of Units allotted to the Unit holder on the Allotment Date will be considered for determining the Loyalty Units