Bharat Bond ETF: The government has launched the fourth installment of Bharat Bond ETF. The new fund offer of the ETF will be open for 7 days and will close for subscription on December 8. Through Exchange Traded Fund (ETF), only AAA-rated corporate bonds of government companies are invested. Bharat Bond ETF is managed by Edelweiss Mutual Fund. The capital raised through this will be used for capital expenditure by Public Sector Enterprises.
The first ETF bond was launched in the year 2019. In the fourth tranche, the government aims to raise Rs 1,000 crore with a green shoe option of Rs 4,000 crore.
The third installment of Bharat Bond ETF got a better response
The government introduced the third phase of Rs 1,000 crore in December last year. During this time it was oversubscribed 6.2 times with bids of Rs 6,200 crore. The second tranche of Bharat Bond ETF was launched in July 2020 and was subscribed to more than three times. Rs 11,000 crore was raised through this. In December 2019, an amount of Rs 12,400 crore was raised in its first phase.
Investing in AAA-rated bonds
Bharat Bond ETF invests only in ‘AAA-rated bonds of public sector companies. The ETF has so far raised Rs 29,600 crore in its three offerings. The Asset Under Management (AUM) of the ETF has crossed the Rs 50,000 crore mark since its inception in 2019. Currently, there are five maturity times for ETFs – 2023, 2025, 2030, 2031, and 2032.
Tuhin Kant Pandey, Secretary, of DIPAM, which comes under the Ministry of Finance, said that since the launch of Bharat Bond ETF, it has received an encouraging response from all categories of investors. Bharat Bond has created a unique opportunity for all Indian investors to invest in PSU Bonds and promote India’s growth story.