Govt likely to launch third tranche of Bharat Bond ETF by Jun-end

Informist, Friday, Apr 9, 2021


–Source: Govt to soon ask PSUs on borrowing requirement for FY22 


By Sagar Sen


NEW DELHI – The government is likely to launch the next tranche of the Bharat Bond Exchange-Traded Fund by June-end and will ask public sector companies for their fund requirements soon, a senior finance ministry official said.


"The last tranche was completed in July and had received good response from investors," the official told Informist. "Now with the new financial year starting, the PSUs will be asked for their fund requirement and the next tranche may be floated by end of first quarter."


The official added the size of the Exchange-Traded Fund will be decided once the meetings with interested PSUs are completed, however, initial estimate suggests it might be around 100-150 bln rupees.


In its maiden issue in December 2019, the Bharat Bond Exchange-Traded Fund had raised 124 bln rupees. The second tranche of the bond ETF in July was subscribed 3.7 times, raising close to 109.9 bln rupees.


The exchange-traded fund, whose units are listed and traded on stock exchanges, is managed by Edelweiss Mutual Fund. The funds raised through the exchange-traded fund is invested in constituents of Nifty Bharat Bond Indices, comprising AAA-rated debt securities of public sector companies.


In the last two tranches, it invested AAA-rated papers issued by entities such as Power Finance Corp Ltd, REC Ltd, Indian Railway Finance Corp Ltd, Power Grid Corp of India Ltd, Indian Oil Corp Ltd, NHPC Ltd, National Housing Bank, Hindustan Petroleum Corp Ltd, NTPC Ltd, National Highways Authority of India, and Housing and Urban Development Corp Ltd.


Market experts expect the next tranche to have different maturity options than the previous two tranches.


In the first tranche, Bharat Bond ETF offered maturity of three years and 10 years, while the second tranche offered maturities of five years and 12 years.


Department of Investment and Public Asset Management Secretary Tuhin Kanta Pandey had previously said the government would like to provide different maturity options for investors under the new series.  End


Edited by Ramya J.S. D'Rozario


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