Bharat Bond ETF: The central government is all set to launch the fourth tranche of Bharat Bond ETF on Friday, December 2. Notably, it is India’s first corporate bond exchange-traded fund.
The new fund offer of the ETF will open on December 2 and close for subscription on December 8, according to a statement issued on Thursday by Edelweiss Mutual Fund, which manages the fund.
The funds raised will be used by Central Public Sector Enterprises (CPSEs) for capital projects. According to the statement, the maturity date of this new Bharat Bond ETF and Bharat Bond Fund of Fund (FOF) series is April 2033.
The government plans to raise an initial Rs 1,000 crore
The government plans to raise an initial amount of Rs 1,000 crore through the launch of this new tranche in the fourth tranche with a green shoe option of Rs 4,000 crore.
The third tranche was introduced by the government in December 2022, with an original issue amount of Rs 1,000 crore. It was over-subscribed 6.2 times with bids for Rs 6,200 crore.
About Bharat Bond ETF
The first offering of Bharat Bond ETF was launched in 2019, which helped CPSEs raise Rs 12,400 crore. In the second and third installments, it raised Rs 11,000 crore and Rs 6,200 crore, respectively. The ETF has so far raised Rs 29,600 crore in its three offerings.
Tuhin Kanta Pandey, Secretary, DIPAM said, “The Bharat Bond ETF program has received an encouraging response from all categories of investors since its launch. Bharat Bond has created an opportunity for all Indian investors to invest in PSU bonds and promote India’s growth story. A unique opportunity to give has been created.” Finance Ministry said.
Bharat Bond ETF invests only in ‘AAA’ rated bonds of public sector companies. Since its launch in 2019, the assets under management (AUM) of the ETF has crossed the Rs 50,000 crore mark.
So far, five maturities of Bharat Bond ETF – 2023, 2025, 2030, 2031, and 2032 have been launched.
The target maturity fund category is growing at an exciting pace after the launch of Bharat Bond ETF by Edelweiss MF. Investment in long term debt has been brought to the fore by these funds. Bharat Bond ETF now has six maturities – from 2023 to 2033 – which will allow investors to choose the right maturity as per their investment goals,” said Radhika Gupta, MD & CEO, Edelweiss Mutual Fund.
(With inputs from PTI)
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