INSUBCONTINENT EXCLUSIVE:
MUMBAI: Stocks that are part of the recently-concluded further fund issue of Bharat 22 ETF are likely to see a rally as traders who sold
their futures contracts before the offering will now reverse their positions
Many traders including arbitrageurs had put money in the Bharat 22 ETF issue which ended on Friday and simultaneously sold futures of stocks
receivable of units by shorting the stocks which are part of ETF
They short futures of high weightage stocks which gives them sufficient hedge
tranche of the Bharat 22 ETF was subscribed 2.3 times on the final day of the offering, with the issue getting subscription to the tune of
?14,000 crore, according to reports
The government had targeted mopping up ?6,000 crore from the Bharat 22 ETF with a greenshoe option of another ?2,400 crore.
The ETF
comprises 22 stocks including that of public sector bluechips and private companies which are strategic holding of Specified Undertaking of
Unit Trust of India or SUUTI
These include NALCO, ONGC, Indian Oil Corp, BPCL, Coal India, SBI, PFC, REC, Axis Bank, Bank of Baroda, LT, ITC, Power Grid and NTPC, among
and likewise how much have people hedged against it, added Gupta.
The government has offered the Bharat 22 ETF at a 2.5 per cent discount to
its net asset value or NAV
futures just like they did in case of the Bharat 22 ETF last year
The stocks like LT, ITC and ONGC which are part of the Bharat 22 ETF are likely to be firm in the coming days given that the hedging
Oswal.
Shares of ITC have fallen nearly 5 per cent in the last one month while that LT have declined 2 per cent during the same period.
