How is the discount for Bharat 22 NFO calculated?

I was reading this Bharat 22 ETF post and read that there is a discount of 3% for retail investors and this is calculated based on the Reference Market Price of the underlying. Does this mean 3% discount on the NAV or is there is a different way of calculating this?

Note: The same calculation applies for the further fund offer which opens on June 20th and closes on June 22nd.

Hi Suresh,

The calculation is a bit complicated to comprehend and below is a gist of it.

So, basically the 3% refers to the discount on the Average value of the VWAP (Volume Weighted Average Price) of each stock which is a constituent of the BHARAT 22 ETF. The VWAP will be considered from 15th - 17th November.

As shown in the screenshot below, if the average of the full day VWAP (15th, 16th & 17th) for L&T is 1215.22 then after the discount of 3% the value would be 1178.76. So, this is the price at which the scheme would purchase the stocks and this is similar for all the stocks which are part of the ETF.

The NAV would then be decided as per the price and you shall the allotment of the units after 5 business days. The fund will be listed on the exchange on 29th November.

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Thanks for the info. Could you pl provide some insight regarding NAV calculation or how is the NAV calculated in this case.

@BishyIPO

The amount that is collected during the NFO will be utilized to buy the shares that constitute the S&P Bharat 22 index (this is the benchmark for the Bharat 22 ETF ) at a discounted price. The NAV would only determined as per the calculation mentioned in my previous post for each and every stock.

You will be receiving an email/SMS from the AMC or CAMS(RTA for ICICI AMC) with the details of the units and the NAV at which it has been allotted to you. If the there are any fractional units, then you receive cash equivalent of such units as refund into your bank account that is linked to your trading account.