This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at skukreja@investitude.co.in
CPSE ETF Further Fund Offer (FFO) – January 2017 Issue – Click Here
We are at the fag end of the current financial year and as always, the government is doing everything it can do to meet its revised target of garnering disinvestment proceeds. It had set a highly ambitious target of raising Rs. 40,000 crore from disinvestment in the beginning of this financial year, but then curtailed it by more than 50% to Rs. 16,027 crore last month in February 2014. I hope it doesn’t fail in its efforts to meet even this revised target.
Before we move forward to know more about our target subject, we need to have some basic understanding of a new index, called CPSE Index, which has been launched by the National Stock Exchange (NSE) and owned & operated by India Index Services & Products Limited (IISL).
NSE CPSE Index
NSE today launched CPSE Index, in which CPSE stands for central public sector enterprises. As the name suggests, this index comprises of some of the big public sector enterprises and here you have the list of those companies.
CPSE Index Composition as on February 28, 2014 & Trade Data as on March 19, 2014
CPSE Index has been launched for a specific purpose and the purpose is to facilitate Government of India’s initiative to sell its stake in some of these CPSEs. In fact, the finance ministry wants to raise an additional Rs. 3,000 crore for its disinvestment programme this financial year and it will be using this CPSE ETF to garner its targeted amount.
CPSE Index has base date of 1st January, 2009 and base value of 1,000. As mentioned above, this index got launched today and stood at 1,898.10 by the end of today’s trading hours. The weights of its constituents will be re-aligned every quarter effective 2nd Monday of February, May, August and November every year.
Goldman Sachs CPSE Exchange Traded Fund (ETF)
Goldman Sachs CPSE ETF is an open-ended index scheme, to be listed on the stock exchanges in the form of an Exchange Traded Fund (ETF) tracking the CPSE Index. This ETF has been launched by Goldman Sachs Asset Management Company Limited and is named as Goldman Sachs CPSE ETF. It is also known as the PSU ETF.
The government of India has authorised only Goldman Sachs to launch this ETF. I would call it GS CPSE ETF or just CPSE ETF for the rest of this post.
Anchor investors have already invested Rs. 850 Crore in this ETF today, so this scheme would require another Rs. 2,150 crore to meet its targeted amount.
Out of the proceeds collected during the NFO period, this scheme intends to purchase the CPSE shares, as represented in the constituent companies of the CPSE Index, in similar composition and weightages as they appear in the CPSE Index. The President of India, represented through different departments and ministries, will sell the shares at a discounted rate to the scheme and the mutual fund will in turn create and allot units of the scheme to its investors.
Subsequently, after the closing of the NFO, the units will get listed on the stock exchanges in the form of an ETF tracking the CPSE Index.
Investment Objective – The scheme intends to generate returns that closely correspond to the total returns earned by the securities as represented by the CPSE Index. However, the performance of the scheme may differ from that of the CPSE Index due to tracking error and also due to scheme expenses.
NFO Opening & Closing Dates – For the non-anchor investors, this fund will open for subscription from tomorrow i.e. March 19th and will run for three days to close on March 21st.
Features of GS CPSE/PSU ETF
Reference Market Price/NAV – New Fund Offers, or popularly known as NFOs, normally get launched at Rs. 10 per unit as their NAV. This will not be the case with this scheme. During the NFO, each unit of this scheme will have a face value of Rs. 10 and will be issued at a premium, equal to the difference between the face value and the allotment price.
NAV of this scheme will be based on the CPSE Index, as the allotment price would be approximately equal to 1/100th of the CPSE Index and would be calculated post adjusting the 5% discount offered by the government to CPSE ETF for buying the underlying CPSE Index shares.
Going by the CPSE Index’ closing value of 1898.10 today, the allotment price of this scheme should get fixed at around Rs. 18 per unit once the allotment gets done. So, if you decide to invest Rs. 1.80 lakh in this scheme, you will be getting approximately 10,000 units of GS CPSE ETF.
5% Discount for Investors – Investors making an investment during the offer period will be given a 5% discount on their investment. This 5% discount on the “Reference Market Price” of the underlying CPSE Index shares will be offered to CPSE ETF by the government of India.
1 Loyalty Unit for Every 15 Units Held – Sops don’t stop with just 5% discount. The investors, who remain loyal to this scheme and hold on to their investments for one year from the date of allotment, will be allocated 1 additional unit for every 15 units held on the record date in March/April 2015. Record date will be determined as the date falling exactly one year from the date of allotment.
Loyalty units would be credited to the demat account of the eligible investors within 30 days from the record date. Non-retail investors will not be offered loyalty units under this scheme.
3.5% Dividend Yield – Based on the dividend paying pattern of these CPSEs, the dividend yield works out to be in the range of 3.5% to 3.8%. Though I do not give much weightage to dividend yield for my personal investments, I think a healthy dividend yield of 3.8% reflects that there is reasonable margin of safety with these companies and downside in their market prices is fairly limited.
10.5X PE Ratio – Price to earnings ratio (P/E Ratio) of CPSE Index is ruling at around 10.5 times these days, which is a steep discount to its historical averages and also a steep discount to Nifty’s P/E multiple of approximately 18.2. This makes CPSE ETF quite attractive from valuations point of view.
Minimum/Maximum Amount to be Raised – The scheme seeks to collect a minimum target amount of Rs. 100 Crores during the NFO Period. Maximum amount to be raised stands at Rs. 3,000 Crores, beyond which the money will be returned back to the investors.
Minimum/Maximum Investment Size – Retail individual investors can invest in the scheme with a minimum investment amount of Rs. 5,000. To remain a retail investor, the investment limit has been set at Rs. 2 lakhs.
Listing – Goldman Sachs has obtained an in-principal approval of NSE and BSE for listing the units of this scheme and the listing would be carried out by the fund house on or before 11th April, 2014.
Demat Account Mandatory – As this is an ETF, the units of the scheme will be available only in the dematerialized/electronic mode. So, you have to mandatorily have a demat account to own its units. Applications without relevant demat account details are liable to be rejected.
Tax Saving u/s. 80CCG – GS CPSE ETF is in compliance with the provisions of Rajiv Gandhi Equity Savings Scheme (RGESS) and thus qualifies for a tax exemption up to Rs. 25,000 under section 80CCG.
As many of you would know, to avail tax benefit u/s. 80CCG, there are two most important conditions. One, your gross total income should not exceed Rs. 12 lakh mark and second, you must be a first time investor in equities. Though it is quite difficult to satisfy both these conditions simultaneously, people who fulfil both these conditions should actually avail tax benefits with this scheme.
Lock-In Period – Investors, who seek tax exemption u/s. 80CCG, will be subject to a lock-in period of 3 years – 1 year of fixed lock-in and 2 years of flexible lock-in. The fixed lock-in period will start from the date of your investment in the current financial year and will end on March 31st next year i.e. 2015.
The flexible lock-in period will be of two years, beginning immediately after the end of the fixed lock-in period i.e. beginning April 1, 2015 till March 31, 2017.
There is no lock-in period applicable for those investors who don’t avail any tax benefit. But, then it is advisable to hold on your investment for one year in order to get loyalty units.
Entry & Exit Load – There is neither any entry load nor any exit load with this fund.
Categories of Investors & Allocation Ratio
Anchor Investors – 30% of Rs. 3,000 Crores i.e. Rs. 900 Crores
Non-Anchor Investors, including Retail Individual Investors, Qualified Institutional Buyers (QIBs) & Non Institutional Investors – 70% of Rs. 3,000 Crores i.e. Rs. 2,100 Crores
As the anchor investors have already poured in Rs. 850 crore, the leftover pie of Rs. 2,150 crore will be available for the retail individual investors, qualified institutional buyers (QIBs) and non-institutional investors.
Fund Manager – This scheme will be managed by 33-years old Payal Kaipunjal, who is an MBA from Wellingkar Institute of Management and also a Financial Risk Manager (FRM) from GARP University. She has a total experience of 9 years and worked with Benchmark Asset Management Company before it got acquired by Goldman Sachs India in 2011.
She has been working with Goldman Sachs since August 2011 and has been managing GS Junior BeES, GS PSU Bank BeES and debt securities portfolio of GS Hang Seng BeES.
Risks
High Exposure to Energy Sector – CPSE Index has an exposure of approximately 59% to the energy sector, with stocks like ONGC, GAIL, Oil India and Indian Oil. So, if not exactly a sector fund, this ETF is highly tilted towards the energy sector.
High Exposure to Public Sector Managements – We all have been hearing of policy paralysis for a very long time now. All these companies are public sector enterprises, in which we all know how policies get framed out and implemented, how things get executed and how good their managements are. So, despite of cheap valuations, it is a big risk if things don’t move as expected.
Passive Management – ETFs are passively managed funds and their performance largely depends on the index they track. As GS CPSE ETF will track the CPSE Index, its performance will completely hinge on the performance of the constituents of CPSE Index. So, in case there is trouble with any of these companies, the fund management will not be able to sell that particular stock till the time the stock moves out of this index.
Final Take
CPSE Index constituents have risen 8.91% in the last 30 days, while they have given a negative return of 2.44% in the past one year. Going by the valuations of these CPSEs and the number of sops this ETF will offer to its retail investors, I think it is giving a great opportunity to the long-term conservative equity investors, who still have a belief that the future holds some kind of promise or scope of improvement for these CPSEs and still have some kind of faith in the policy execution of the next government.
Personally, I would like to invest some part of my money into this ETF as I think most of these CPSEs are quoting at a steep discount to their life time highs and also to their historical average PE multiples. Though the stock prices of these CPSEs have run up quite rapidly in the last month or so, I still think there is enough value in these companies.
Also, I am hopeful of a strong government taking charge at the centre as the election results get announced in May. I think a strong, decisive government can have a dramatic effect on the sentiment driving the stock prices of these CPSEs.
Also, as a human nature, discounts and freebies attract me as well. I think 5% discount and a bonus unit after one year of investment are reasonably good attraction triggers for me.
Investors, who do not have a demat account and wish to save tax under section 80CCG, will have only 3 working days for them to get a new demat account opened in compliance with the provisions of Rajiv Gandhi Equity Savings Scheme and invest in this scheme. So, please hurry and avail the benefits of this scheme.
KIM & Application Form of Goldman Sachs CPSE Exchange Traded Fund
& also tax benefit in option 2.
Regards
What to do
1. Sell
2. Wait for one year to avail discount
Request views.
Regards
Hi,
This decision varies from individual to individual. If you are satisfied with 14.15% till date, then you should book your profits and pay a short term capital gain tax of 15.45%.
If you are ready to bear some risk, then you can hold on to these units for one year, become eligible for loyalty units as well as tax free long term capital gains.
There is no doubt that 14.15% returns in such a short period of time is very lucrative for its investors to book profits.
Goldman Sachs CPSE ETF to get listed on the exchanges on Friday, April 4th.
http://www.business-standard.com/article/markets/govt-etf-investors-strike-gold-114040100913_1.html
How would dividend payouts of constituent comapnies be adjusted? Will they pay dividend to ETF holders or they will get bonus units?
Hi Shashwat,
Please check this info from the SID – “The income received by way of Dividend shall be used for recurring expenses and Redemption requirements or shall be accumulated and invested as per the investment objective of the Scheme. There is a risk of higher Tracking Error due to the income received by way of Dividend till it is reinvested.” So, I don’t think the investors should expect any dividend out of this scheme.
Hi Shiv
Goldman Sachs has given a different view on dividends in CPSE ETF. Abstract from their interview in ET given below
What are the incentives or assurances CPSE ETFs give to
investors?
In the ETF structure, dividends are accumulated by
the fund and included in the daily NAV computations, and hence, the benefit is not lost by investors. Also, the ETF has the option of paying out accumulated dividends periodically to investors.
Regards
Ramadas
Hi Ramadas,
I did not mean that the investors will not get any benefits out of the dividends declared by the constituents of this ETF/CPSE Index. I meant that the investors will not be paid any dividend in cash. Whatever dividends the fund will get from these companies, either it will be reinvested into these companies or it will be used for some miscellaneous requirements of the scheme. The benefits of those dividends will not get lost for the investors.
Shiv,
I just saw an update and I have been allotted only 8841 units on my application for Rs 2 Lakhs as a Reatail investor.
Do you have any info on the basis of allottment ?
Thanks,
Dr. S. Hariharan.
I guess upto 5000 units there is full allotment and above that proportionate allotment. Multiply units by 17.5 which is the allotment price, you will get the remaining amount refund
Thanks Shashwat for this info !! Allotment Price is Rs. 17.4504 to be precise.
I had called up Goldman Sachs and the following is the information that I gathered:
Allotment has been done in full upto 5000 units and thereafter proportionate to the oversubscription.
I got allotment of 5434 units for Rs 1 lac application.
The price at which allotment has been done is Rs 17.4504, which is at a 5% discount to the calculated NAV of the index.
The NAV is 1/100th of the CPSE index.
Any excess amount will be credited into the Dmat accounted linked
Trading will happen on or before April 11, 2014.
Thanks Mr. Narasimhan for sharing this info !!
Considering Allotment Price of Rs. 17.4504 and a discount of 5%, the NAV of this scheme at the time of allotment was Rs. 18.3688. CPSE Index today closed at 1973.70, so the applicable NAV is Rs. 19.7370, which means the scheme has generated 13.10% returns in just 7 working days.
Also, I think the refund amount will be credited to the bank account which is linked to the demat account and not to the demat/trading account itself. I think the company should get the units listed for trading very soon, probably this week itself or early next week.
Hi Dr. Hariharan,
I think the Basis of Allotment has not been published as yet. I hope the company publishes it in a day or two. I’ll share it here as soon as I have it.
Allotment Price is confirmed though, it is Rs. 17.4504 per unit, which makes your refund amount to be Rs. 2 lakhs – (8,841 * 17.4504) = Rs. 45,721
Shiv, the scheme will be listed on or before 11th of April 2014. Which means the allotment might happen a couple of days before 11th.
Source : http://www.benchmarkfunds.com/gs/Documents/CPSEETFPresentation.pdf (refer page 20)
I think the listing should not get delayed to April 11th, it should happen earlier than that. Allotment will definitely be made before listing.
I have applied for 20,000.00 only and I got 1140 units only @ Rs.17.5438.How?
Hi Dhananjai,
1140 units * Rs. 17.4504 makes it Rs. 19,893. So, you’ll get a refund of approximately Rs. 107.
I had applied online through HDFC SECURITIES,as per information given by customer care that HDFC SEC. has charged RS.100 and only Rs.19900.oo has been submitted to CPSE ETF.As such only 1140 units have been allotted with Rs.6.54 refund.
Oh ok, now I got it. HDFC Securities must have opted itself ‘IN’ for Rs. 100/150 towards transaction charges.
Quick question – I have invested a nominal amount via HDFC trade / demat on 21st March. The amount was debited from bank account.
When will I get to know the allotment status?
If unsuccessful, how will the refund happen? To the same bank account through which investment was made?
Hi,
I have no information when the units of this scheme will get allotted. Also, refund will get credited to your bank account which is linked to your demat account.
Shiv, has GS announced the Reference Market Price yet? Since, RMP was going to be based on VWAP of offer open days, this number should be available, right?
Hi Neel,
Though they could have announced the “Reference Market Price” based on the formula they have mentioned in the prospectus, they have not actually done it yet. I’ll share this price as soon as I get any info regarding the same.
Thank you so much Shiv. As always, you are super-helpful. Keep reading your posts on a regular basis.
Thanks a lot for your kind words Neel and also for being a regular reader !!
Dear Shiv,
Any info about final subscription figure and its category-wise (QIB, NII, Retail) break-up ?
Thanks
Category wise breakup doesnt matter here. There is only two category. Anchor investors and non anchor investors. There is no retail quota. Best possibility of allotment is 2/3rd of amount applied for any retail investor. Subscription has crossed 4200 crore as per news channels. For non anchor investors , 3350 crore applied compared to 2150 crore available
Regards
Ramadas
Thanks Ramadas for sharing this info !!
Hi Shiv
There are also news report that government has asked goldman sachs to give preference to retail investors in allotment and ensure every retail investor gets minimum 5000 ( not clear units or rupees ). Though they are not legally bound to do the same , let us hope they prefer retail. In spite of non coperation from majority of brokers , this issue still got 20000+ retail applicants which is very significant in three days
Regards
Ramadas
Hi Ramadas,
If Goldman Sachs accepts this recommendation, then it will really be a win-win situation for the retail investors – 5% discount, 6.67% bonus after one year, preference in allotment, attractive valuations, good dividend yield, what else retail investors could ask for. The only thing required is professional management and bold government policies. This fund has the potential to give 50-100% returns to its investors in the next 1-2 years.
Great work Shiv, as always.
But 50-100% returns in 1-2 years? Isn’t that a bit over-optimistic?
Thanks Bhavin !!
There is a difference between potential and expectations. I am not that optimistic to expect this fund to give 50-100% returns in 1-2 years, but I still mean it has the potential to give such returns if the government policies move in the right direction. Check this Moneycontrol link:
http://www.moneycontrol.com/news/fii-view/how-gas-price-hike-will-impact-oil-cos-macquaries-take_906682.html
Dear Shiv and Ramadas,
I think, categorywise break up does matter, in any issue. Heavy over-subscription in QIB / NII categories will result in high unsatisfied demand, which may partially be satisfied by buying from secondary market, post listing. This buying supports the market price against selling by retail and others who may have invested only for short term. So, I think, categorywise break-up of subscription gives some idea about post listing price behaviour.
So if you have info about categorywise break-up, please share it.
Thanks
Hi TCB
In a general share IPO , whatever you have mentioned is correct. In this case , ETF share price should be determined by price of undelying securities. Even if ETF demand rises , AMC can buy underlying securities from market/from government and supply ETF without its own price increasing seperate from tracking index. Applying through NFO , has some advantages for retail like no brokerege , retail discount and year end bonus. Unless demand for underlying securities like ONGC , GAIL goes up , ETF price will not go up based on its demand only. Also note that most of the underlying securities like ONGC are huge market cap companies and small demand is not good enough to push prices.
Regards
Ramadas
Hi Ramadas, Hi TCB,
I think 5% discount might be one of the reasons for huge subscription by all categories of investors. I think once these units get listed, there should not be any extraordinary demand for this ETF. But, that should not affect its NAV much, it should trade close to 1/100th of CPSE Index.
Dear Shiv and Ramadas,
1) What I understand from Ramadas’s reply, is that the AMC will try to keep the market price of ETF units as near as possible to the NAV, by selling new units, if the demand in market is high. The new units will be created out of new procurement of shares of the CPSE Index, from the market or from the government. Is my understanding correct ?
2) If yes, is the reverse also true ? i.e. if the market price of the ETF units is falling below its NAV due to huge supply pressure, will the AMC purchase units from the market to keep the price near its NAV ? If yes, will the units so purchased, be broken down into shares of the CPSE Index and sold back to the government or into the market ?
3) If 1) and 2) above are true, has the government agreed to buy / sell shares of the CPSE Index companies from / to the AMC on a continuous basis ?
4) If the above mechanism is applicable to this ETF, then I think, there will never be any problem of low liquidity which was a concern for me while investing in this ETF. Do you agree ?
Thanks
Dear TCB,
1. I don’t think that should be the case. It is not the fund’s responsibility to provide liquidity in case of ETF. I think the ETF’s NAV should track the CPSE Index and market forces will keep the NAV close to its real value.
2. My point is – why would you sell your units at a steep discount to its real value, which is 1/100th of CPSE Index?
3. There is some kind of provision with this scheme in which the government is going to further sell its stake in these companies to this scheme. This provision is called “Tap Structure”. But, I think there is no provision for the government to buy back any stake in these companies.
4. Not sure, but I think liquidity should not be a major concern for retail investors.
Dear TCB,
I think when Ramadas mentioned that category wise breakup doesn’t matter here, he meant it from allotment point of view only and not any other technical point of view. Probably you are right in your own observations. Also, I don’t have any category wise break-up as of now.
Dear TCB,
Please check this link – http://www.business-standard.com/article/markets/govt-gets-rs-4-000-cr-from-etf-exceeds-disinvestment-target-114032100905_1.html
As per this link, it stands at Rs. 4,000 crore. But I think it should be more than that.
Dear Shiv,
Subscription has reached 2400 crore as per Business Standard – http://www.business-standard.com/article/markets/cpse-etf-subscription-reaches-rs-2-400-cr-on-day-2-114032000942_1.html
If the issue is over-subscribed, alloment will be on Proportionate basis ?
Thanks
Yes, if the issue gets oversubscribed, alloment will be made on a pro-rata basis.
Dear Shiv,
Great analysis as usual.
1) I understand that at the time of allotment, NAV of the ETF units will be 1/100 of the CPSE Index and Allotment price will be at a discount of 5% to the NAV. Is this correct ?
2) Furthur, I understand that post listing, NAV of the ETF units may differ from the CPSE Index due to tracking error and scheme expenses. How much would be this deviation of the NAV from the CPSE Index ?
3) For anything which is traded, market price is determined by demand and supply. For the units of this ETF, will the market price be different from the NAV ? If yes, market price of the units may move in a different direction than the CPSE index based on market forces. Is this possible ? How high can this deviation be ?
4) Is the 5% discount given only to retail applicants or to all NFO applicants ?
5) Do you expect any listing gain, especially considering the 5% discount ?
Thanks
Thanks TCB !!
1. Your understanding is correct!
2. Under normal circumstances, tracking error should not exceed 2% annually. Also, scheme expenses have been capped at 0.49% p.a.
3. It is an ETF, open-ended and listed, so you can buy or sell its units at the traded price in the market. I don’t think it will move in the opposite direction to the CPSE Index.
4. 5% discount is given only to the retail applicants.
5. Yes, I do expect some listing gains.
Dear Shiv,
Can you please re-confirm that 5% discount is given only to retail investors and not to NIIs / QIBs ? In some research reports / articles, which I came across, it is just mentioned “5% discount will be given to investors in this issue”. “Retail” investors is not specifically mentioned.
Thanks
Sorry TCB, I think you are right. I was under the impression that the 5% discount is for the retail investors only. But, the language of SID suggests it is for all the investor categories. Actually loyalty units are exclusively reserved for the retail investors and not 5% discount. I’ll make the correction in the article as well. Thanks for pointing it out !!
Hi Shiv,
I think 5% discount to all investors including QIBs / NIIs is the main reason for high subscription especially by QIBs / NIIs. But the unsatisfied demand of these investors may not result in post listing buying by them, as they will not get any discount on purchasing units from the market. Do you think this will result in low liquidity and the units trading at a significant discount to the NAV post listing due to shortage of buyers ?
Hi Mitesh,
Low liquidity due to low buying interest is very much possible. But, that is the case with many such ETFs.
What would happen if govt gets more than 3000 crores for subscription?
How would allotment NAV be calculated,on the basis of first day of issue or last day of issue. Since inlast 2 days prices of constituent shares has fallen down eg. Coal India and REC
Mr Shiv & Shashwat , Yes This is Very Important Query.
CPSE Index From the 1st Day Close of 1,898.10
now seen at 1818 (approx 4 % ) lower then 1st day close .
so which price Allotment NAV ? Also the 1st query
What would happen if govt gets more than 3000 crores for subscription?
Hi Shashwat, Hi Dr. Agarwal,
1. If Goldman Sachs gets more than Rs. 3,000 crore, it would retain only Rs. 3,000 crore and refund the excess amount.
2. Calculation of Allotment Price – As per its SID – “The Scheme will endeavor to invest the NFO proceeds in the underlying Security on or before the Allotment Date. NFO proceeds would be invested post adjusting discount offered by GOI to the Scheme for buying Securities underlying the Index.
Allotment Price = Amount Collected in the NFO – Refunds on account of application rejections, if any / Net Assets in the Scheme on the date of allotment / one hundredth of the benchmark index on the date of allotment
If required, I’ll try to a post on the same tomorrow.
Hi
I ordered through icicidirect but it said Goldman Sachs CPSE Corporate investors. Wondering if I selected wrong option(being retail), I am unable to cancel it also.
Please advise. Thanks
Hi Harineem,
You need to contact ICICI Direct to get it rectified.
Thanks done that they say they will treat it as individual investor.The site is pretty misguiding with the link showing Corporate investor option first and you have to scroll down the page to find the individual investor option.
Great work Shiv.
Thanks Parul !!
Great post Shiv – I remember hearing about this option to bring in disinvestment proceeds for the government about an year ago but then forgot all about it.
I think this is a better way for the government to disinvest than what they have been doing, and as for investors, that of course is everybody’s individual call.
Thanks Manshu !!
I agree with you that it is a better way of doing disinvestment in these CPSEs. But, then I think it is not the best way. It would be better if most of these companies are sold to private players through transparent & competitive bidding. These organisations should be made to work professionally under private ownership and be accountable to its shareholders.
I just checked …. my ICICI Direct online is having option to subscribe to this NFO (under Mutual Funds > NFO/FMP option) with Rs 2 Lacs as limit for retail-investor. I haven’t applied as yet; waiting to see today’s subscription information. Shiv or anyone know that? let me know.
Thanks KS for this info !!
Also, subscription figures for NFOs do not get disclosed by the AMCs. So, I think the final subscription figures will get known only after this issue gets closed.
CPSE ETF collects an additional Rs. 1,o00 crore today, total figure stands at around Rs. 1,800 crore
http://www.thehindubusinessline.com/markets/cpse-etf-gets-bids-for-rs-1800-cr/article5805705.ece?ref=sliderNews
Shiv, thanks for the link. Useful. Especially, info in last two paraagraphs under: “Why did FIIs keep away” and “Good retail appetite”
You are welcome KS !!
Hi Shiv,
Each time a new financial product is launched I look for your article on the same.
How can we apply, through online broking account, under NFO option?
Hi Shashwat,
I have Kotak and Edelweiss demat/trading accounts and till now they have not introduced online investment facility for this ETF. I am not sure about others, but I think ICICI Direct is providing this facility. I hope some info should come out by today evening. I’ll try to cover this topic if some reliable info comes by.
Shiv,
You are correct about ICICI, I have applied on ICICIDirect. it is under Mutual Funds >> NFO
Regards,
Sanjay
Thanks Sanjay for this info !!
Hi Shiv,
I also had the same question: how to invest online in this NFO.
So waiting to hear from you any means other than ICICI Direct.
Hi Amlan,
I have just posted the following article, please check:
http://www.onemint.com/2014/03/20/how-to-invest-in-goldman-sachs-cpse-etf-online-offline/
Thanks Shiv.
Hi Shiv,
How can we apply through the offline mode? Where are the forms accepted?
Request you to elaborate the offline application process for forthcoming issues/NFOs since not all may be conversant/comfortable applying online.
Thanks!
Hi Mayank,
I have tried to explain the offline procedure to invest in this scheme with the following post, please check:
http://www.onemint.com/2014/03/20/how-to-invest-in-goldman-sachs-cpse-etf-online-offline/
I hope it helps !!
Thanks Shiv for the prompt reply. Appreciate your help on this.
You are welcome Mayank!
Nice analysis. Thanks.
Regarding Tax benefit
1. if someone have gross total income less than Rs. 12 lakh but is not a first time investor in equities, will the person get tax benefit of this scheme ?
2. If not, then is it worth to invest (without having tax benefit) ?
Rgds.
Thanks Kartavi !!
1. You need to fulfill both the conditions in order to avail tax benefit u/s. 80CCG.
2. Personally, I think it is worth investing in this scheme even without tax benefits. Different people have different views regarding this.
thanks Mr Shiv ,
If we dont take Tax benefit –
After we get allotment we can sell it immediately Or its locked for 1 Year ?
My broker dont know anything and confusing me .. so pl. guide ..
Without tax benefits, there is no lock-in period.
dear Mr Shiv.
If we buy from secondary market still we get these Loyalty units ??
thanks
No Dr. Agarwal, loyalty units will not be allotted if these units are bought from the secondary markets subsequently. You’ll be eligible to get loyalty units, 5% discount only if you subscribe to these units during the NFO period.