Bharat Bond ETF Third Tranche To Be Launched On December 3

Bharat Bond exchange traded funds' third tranche will be launched on December 3 with the aim of raising Rs 5,000 crore

Bharat Bond ETF Third Tranche To Be Launched On December 3

Bharat Bond exchange traded funds' third tranche will be launched on December 3

Bharat Bond exchange traded funds' (ETF) third tranche will be launched on Friday, December 3 with the aim of raising Rs 5,000 crore for investing money in growth plans of state-owned enterprises. 

The new fund offer (NFO) will start on December 3, 2021 and end on December 9, 2021. The new series will mature on April 15, 2032.

The fund offer will have a base issue size of Rs 1,000 crore with an open greenshoe option.

The greenshoe option is expected to be around Rs 4,000 crore, thus taking the total amount to be mobilised through the ETF to Rs 5,000 crore.

The assets under management (AUM) of Bharat Bond ETF, which is managed by Edelweiss Mutual Fund, stands at Rs 36,359 crore at the end of October 2021.

“BHARAT Bond ETF programme has achieved some important objectives that were envisioned while creating the blueprint of this program. It has provided aggregate savings in borrowing costs for participating public sector enterprises. It has provided easy access to investors into bond markets, especially retail investors who are looking for an alternative to fixed deposit,” said Tuhin Pandey, Secretary, department of investment and public asset management (DIPAM) in the finance ministry.

Bharat Bond ETF is an exchange-traded fund that invests in the debt of public sector companies. The ETF currently invests only in ''AAA'' rated bonds of public sector companies.

The funds raised through the debt ETF helps in smoothening borrowing plans of the participating public sector undertakings or public sector banks. It also helps them in meeting their capital expenditure needs.

The second tranche of the Bharat Bond ETF, which was launched in July 2020, was oversubscribed more than three times, collecting about Rs 11,000 crore. It had fetched about Rs 12,400 crore in its debut offer in December 2019.

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