Capital Markets: Challenges and Developments

Bharat 22 ETF

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Bharat 22

Mains level : Disinvestment processes in India


  • The Further Fund Offer 2 (FFO 2) of Bharat 22 Exchange-Traded Fund (ETF), which is part of the government’s divestment programme, will be open for subscription for investors.

Bharat 22

  • Bharat 22 is an ETF that will track the performance of 22 stocks, which the government plans disinvest.
  • The ETF unit represents a slice of the fund, issued units are listed on exchanges for anyone to buy or sell at the quoted price.
  • The B22 will span six sectors, such as basic materials, energy, finance, FMCG, industrials and utilities.
  • Besides public sector banks, miners, construction companies, and energy majors, the ETF will also include some of the government’s holdings in SUUTI (Specified Undertaking of Unit Trust of India).
  • The B22 ETF will be managed by ICICI Prudential AMC while Asia Index will be the index provider.
  • The index will be rebalanced annually.

About Exchange Traded Funds (ETFs)

  • ETFs are mutual funds listed and traded on stock exchanges like shares.
  • The ETF simply copies an index and endeavors to accurately reflect its performance.
  • In an ETF, one can buy and sell units at a prevailing market price on a real-time basis during market hours.
  • There are four types of ETFs already available — Equity ETFs, Debt ETFs, Commodity ETFs and Overseas Equity ETFs.
  • The Bharat 22 ETF to be offered now allows the Government to park its holdings in selected PSUs in an ETF and raise disinvestment money from investors at one go.
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