Government Likely to Launch Another ETF: Report

After the success of its first exchange-traded fund which comprised shares of state-owned companies, the government is reportedly looking to launch another ETF which will have blue chip stocks like ITC, Larsen & Toubro and Axis Bank.

The government through its holding company, Specified Undertaking of Unit Trust of India (SUUTI) holds 11.27 per cent in ITC, 8.18 per cent in L&T and 11.66 per cent in Axis Bank. The value of these holdings is over Rs 56,000 at current market price.

After the recent surge in markets, the government wants to raise money through selling its stake in the above-mentioned blue chip private companies along with some blue chip public sector companies through an exchange-traded fund, a news report quoting Finance Secretary Arvind Mayaram said

The government had proposed to raise around Rs 43,000 crore through disinvestment of its stake in state-owned companies and an additional Rs 15,000 crore from sales of residual holdings in formerly state-held companies. This ETF, if launched will go a long way in helping the government achieve its disinvestment target for the current year.