CPSE ETF has outperformed Nifty by a big margin: Sundeep Sikka

In a chat with ET Now, Sundeep Sikka, ED & CEO, Rel Nippon Life AMC, says the fund is the best way to play the India growth story. There cannot be a better basket where you have the top 10 mahraratna and navratna companies of India.

Edited excerpts:


How has the CPSE ETF been performing?

If you were to look back over the last three years ever since the CPSE ETF has been launched, performance has been outstanding, compared to 7% by benchmark Nifty, the fund has given a return of almost 15%. In the last one year also, the return has been 17% compared to 5% of Nifty.

We see this as the best way to play the India growth story. There cannot be a better basket where you have the top 10 mahraratna and navratna companies of India. If India has to do well, these companies and these sectors have to do well.

We are very excited with the road shows that we have been conducting. Considering the discounts that the government has offered, we believe it is a very interesting opportunity and we sense a lot of retail investors will be coming from across the country.

What are the key queries regarding these PSUs right now? Which all cities have you visited in order to launch and lobby for the CPSE ETF?

We have had road shows in Ahmadabad, Rajkot, Delhi, Mumbai, Calcutta, Bangalore. We will be covering about 25 cities in India. Three years ago, when it was launched, it was an unknown concept. I really complement the Government of India because ETFs were not very popular in India at that time. This achieved twin purpose of both disinvestment as well as taking the navratna companies to the retail investors. So more than any questions, we have been getting compliments and based on the discount and overall outlook of the sector, a lot of investors who have been missing the opportunity to invest three years back, will come into this issue.

What about the reform process regarding the value unlocking of PSUs? Can you tell us a little bit more about that?

Let us look at our three years, All these companies in the basket have been doing very well. Ultimately, the performance of the index, is basically a sigma of the basket and clearly we have companies in sectors which are very critical for the country whether it is mineral, oil, construction etc. These sectors, these companies have to do well and clearly on the valuation perspective also, while Nifty has a dividend yield of about 1.5%, this basket has a dividend yield of 4%. If we were to see again from a PE ratio, this basket has a PE of 11% compared to Nifty 22. I firmly believe the companies in this basket, will keep doing well. The government has been taking a lot of initiatives and we remain bullish both on the sector as well as the basket.