BHARAT Bond ETF: Check subscription period, maturity date, yield, other details

BHARAT Bond ETF: The new and fourth tranche of BHARAT Bond ETF, India's first corporate bond exchange-traded fund (ETF), will open today, December 2. The new fund offer subscription will close on December 8. The first offering of the ETF was launched in late 2019. 

In a statement on Thursday, Edelweiss Mutual Fund said that the new Bharat Bond ETF and Bharat Bond Fund of Fund (FOF) series will mature in April 2033, and offer a yield-to-maturity of 7.50 per cent. The funds track the returns of the Nifty BHARAT Bond Index. 

To date, five maturities of Bharat Bond ETFs have been launched -- 2023, 2025, 2030, 2031, and 2032. The asset under management (AUM) of the ETF has crossed the Rs 50,000 crore mark since its inception in 2019. 

Through the latest tranche, the Central government plans to raise an initial amount of Rs 1,000 crore with a green shoe option of Rs 4,000 crore. A greenshoe option, or an over-allotment clause, is a provision in an IPO underwriting agreement that allows the underwriter (here the government) the right to sell more shares than originally planned. 

Top Features  

• Bharat Bond ETF invests only in ‘AAA’-rated bonds of public sector companies.  
• The funds raised through the bond would be utilised for undertaking capital expenditures by central public sector enterprises (CPSEs). It also helps them in meeting their capital expenditure needs. 
• Bharat bond ETFs offer higher degree of certainty of returns, if investors hold them till their maturity period, with a higher safety of capital as it invests in government-owned AAA-rated public sector bonds. 
• The latest ETF will include papers issued by the National Bank for Agriculture and Rural Development, National Highways Authority of India, Power Finance Corp, and NTPC among others.  Fund house Edelweiss designs and manages ETFs on behalf of the government, and has so far launched ETFs through three tranches with total assets under management of over Rs 500 billion rupees. In the last one year, these ETFs have generated returns in the range of 2 per to 4 per cent as on November 30, the fund house said in a statement.