Bharat Bond ETF: Second tranche opens today, govt eyes Rs 14,000 crore

The government launched second tranche of Bharat Bond exchange traded fund (ETF) today through which it is looking to raise up to Rs 14,000 crore.  The subscription for the ETF will be closed on July 17. The ETF is an attempt by government to meet its divestment target for this fiscal year.

Edelweiss Asset Management will oversee the proceedings of the ETF.

The ETF will invest funds in constituents of the Nifty Bharat Bond Indices consisting of AAA-rated public sector companies.

The fund will raise an initial amount of Rs 2,000 crore with a green shoe option of Rs 6,000 crore in 2025 maturity, and a second one with initial amount of Rs 1,000 crore with a green shoe option of Rs 5,000 crore in 2031 maturity, based on market demand.

Today's fund launch comes after the announcement of initial series of the ETF in December 2019.

Bond Fund With a Difference

The first tranche of Bharat Bond ETF was subscribed 1.7 times with the government garnering over Rs 12,400 crore from the issue. 

Bharat Bond ETF ensures an additional source of funding for Central Public Sector Undertakings (CPSUs), Central Public Sector Enterprises (CPSEs), Central Public Financial Institutions (CPFIs) and other government organisations.

It provides opportunity to retail investors to participate in quality public sector bonds at an affordable cost.

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