The government on Friday announced a new exchange-traded fund (ETF), Bharat-22, which consist of 22 bluechip stocks spread across 6 sectors.
The analyst community has already given a thumbs up to the Bharat-22 exchange traded fund (ETF) as it reflects the confidence of the government in its state-run public sector companies which offers value for money to investors.
The move will help the government to sell its equity stakes in state run firms and also achieve its objective to raise Rs 72,500 crore through disinvestment in FY18.
The pro-growth polices initiated by the Modi-led government changed the inherent profile of PSUs which are now on track to get re-rated. The product is good for investors who have a long term horizon while investing.
“Bharat 22 has been formed keeping in mind the divestment strategy of the Government of India. It is a canny way of disinvestment by offering a basket of shares instead of individual shares,” Jimeet Modi, CEO, SAMCO Securities told Moneycontrol.
“It is more of a defensive play. This ETF is well suited for long term risk averse investors and will not be suitable for aggressive investors seeking higher returns,” he said.
Top PSUs stocks which are part of the Bharat 22 index include names like National Aluminium Company, ONGC, IOC, BPCL, Coal India, SBI, Axis Bank, Bank of Baroda, REC, Power Finance Corp., Indian Bank, ITC, L&T, Bharat Electricals, EIL, NBCC, Power Grid, NTPC, Gail India, NHPC, NLC India, and SJVN.
“Bharat-22 is adverse to political risk, changes in government policy and governance of PSU which was less active historically. Whereas the main reason for the attractiveness of PSU in the recent years are change in Governments working & policies towards the fiscal & monetary performance of the country,” said Nair.
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