Third tranche of Bharat Bond ETF to be launched on December 3; here're the details

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The third tranche of Bharat Bond Exchange-Traded Funds (ETFs) will be launched on December 3, with the NFO (new fund offer) continuing till December 9. With a base issue size of Rs 1,000 crore and an additional greenshoe option of Rs 4,000 crore, all categories of investors will be allowed to participate, with a maturity date set at April 2032.

“BHARAT Bond ETF program 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 CPSEs/CPSUs/CPFIs. 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, DIPAM, Ministry of Finance.

With a defined maturity date and the provision to buy/sell your units on NSE, the ETF allows you to partake in the growth story of India's public sector by investing in the bonds of these companies, provided you have a demat account. Notably, cumulative assets under management (AUM) of the BHARAT Bond ETF, as of October 2021 was Rs 36,359 crore.

Deliberations of launching a Bharat Bond Fund of Funds on similar lines is also in pipeline to cater to investors who do not have a demat account.

Managed by Edelweiss Mutual Fund, the Bharat Bond ETF program is a government initiative run by the Department of Investment and Public Asset Management (DIPAM). Investments are made in constituent companies of the Nifty Bharat Bond indices, which comprise majorly of highly-ranked, AAA-rated public sector companies.

“With this new launch of BHARAT Bond ETF, we now have five maturities on the yield curve – 2023, 2025, 2030, 2031, and 2032, which will help investors to choose the right maturity according to their needs. We are happy to see healthy demand from investors for these ETFs in the current environment where safety is paramount,” said Radhika Gupta, CEO, Edelweiss Mutual Fund.