CPSE ETF FFO – AN ENERGIZING OFFER
- Date: 14th Jan 2017
- FFO Application: 18-20th Jan and Listing by 10th Feb, 2017
- Amount to be raised: maximum of Rs. 6,000 cr.
- Managed by Reliance Nippon Life Asset Management
- Central PSEs, Exchange Traded Fund, Further Fund Offer
- Buy with a 1 year perspective.
Overview: The Scheme is a follow on issue after the 2014 offer which was quite successful. CPSE ETF facilitates GoI’s initiative to disinvest stake in CPSEs through the ETF route. Past performance of CPSE ETF 2014 has been good with 19.8% CAGR over 33 months. A discount of 5% on the “FFO Reference Market Price” of the underlying shares of Nifty CPSE Index shall be offered to FFO of the Scheme. There are high sectoral risks in Oil and Gas sector with a commodities play. Also typically the asset rich PSUs are slow moving firms with a poor, lethargic culture. However overall the offer is attractive and rated a BUY with a 1 year perspective.
Advice: This is a medium risk, medium return offering suitable for conservative investors. Buy with a 1 year perspective.
For more details, see our entire report,
Punit Jain, founder, JainMatrix Investments