The Indian government will launch the fourth tranche of the Bharat Bond ETF in December this year. India’s first corporate bond exchange-traded funds are likely to be in the market by this year’s end. The money raised will be used by public sector businesses to fund capital projects.
An official from the National Stock Exchange told the news agency PTI, “We are currently in discussion with CPSEs and assessing their needs. The issue size for the fourth tranche of Bharat Bond ETF could probably be close to last year.”
The official from the NSE said, “Our endeavour has been to expand the maturity period to give investors an option to choose the period of investment as per their need. In this tranche we would look to give investors a new option for choosing the maturity period.”
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Last December, the government launched the third tranche with a base issue size of Rs 1,000 crore. The share was oversubscribed 6.2 times with bids worth Rs 6,200 crore coming in. The maiden offering of Bharat Bond ETF was launched in 2019 with an aim to aid the Central Public Sector Enterprise to raise Rs 12,400 crore.
In the second and third tranches of the Bharat Bond, the NSE raised Rs 11,000 crore and Rs 6,200 crore, respectively. The third offering of ETF has raised Rs 29,600 crore so far. Since its inception, the asset under management (AUM) of the ETF has crossed the Rs 50,000 crore mark.
National Stock Exchange’s Bharat Bond ETF invests only in AAA-rated bonds of public sector companies. Edelweiss Asset Management is the fund manager of the Bharat Bond ETF. At present, the ETF offers 5 different maturities- 2023, 2025, 2030, 2031, and 2032.
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