Bharat Bond ETF: The Union government is 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.
According to a statement released on Thursday by Edelweiss Mutual Fund, which manages the fund, the ETF's new fund offer will begin on December 2 and end for subscription on December 8.
The money raised would be used by central public sector firms to fund capital projects (CPSEs). According to the statement, the maturity date for this new Bharat Bond ETF and Bharat Bond Fund of Fund (FOF) series is in April 2033.
The government plans to raise an initial amount of Rs 1,000 crore
The government plans to raise an initial sum of Rs 1,000 crore through the introduction of this new series 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 a base issue amount of Rs 1,000 crore. It was over-subscribed 6.2 times with bids worth Rs 6,200 crore coming in.
About Bharat Bond ETF
The maiden offering of Bharat Bond ETF was launched in 2019, helping CPSEs raise Rs 12,400 crore. In the second and third tranches, it had raised Rs 11,000 crore and Rs 6,200 crore, respectively. The ETF has raised Rs 29,600 crore in its three offerings so far.
"Bharat Bond ETF programme has received an enthusiastic response from all categories of investors since its launch. Bharat Bond has created a unique opportunity for all Indian investors to invest in PSU Bonds and fuel India's growth story," Tuhin Kanta Pandey, Secretary, DIPAM, Ministry of Finance, said.
Bharat Bond ETF invests only in 'AAA'-rated bonds of public sector companies. Since its launch in 2019, the asset under management (AUM) of the ETF has crossed the Rs 50,000 crore-mark.
So far, five maturities of Bharat Bond ETFs have been launched -- 2023, 2025, 2030, 2031, & 2032.
"Target Maturity Fund category is growing at an exciting pace post the launch of Edelweiss MF's Bharat Bond ETF. Investing in long-term debt has been brought to the forefront by these funds. Bharat Bond ETF now has six maturities –- from 2023 to 2033 -- which will allow investors to select the right maturity as per their investment goals," Radhika Gupta, MD and CEO, Edelweiss Mutual Fund, said.
(With inputs from PTI)