etf: Fourth tranche of Bharat Bond ETF likely in December

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The government plans to launch the fourth tranche of Bharat Bond ETF, India’s first corporate bond exchange-traded fund, in December, an official said. The funds raised would be used to undertake capital expenditure by public sector enterprises.

“We are currently in discussion with the CPSEs and assessing their needs. The issue size of the fourth tranche of the Bharat Bond ETF could probably be close to last year’s,” the official told PTI.

In December last year, the government launched the third tranche with a base issue size of Rs 1,000 crore. It was oversubscribed 6.2 times with offers worth Rs 6,200 crore.

The first Bharat Bond ETF offering was launched in 2019, helping CPSEs raise Rs 12,400 crore. In the second and third tranches, it had raised Rs 11,000 crore and Rs 6,200 crore, respectively. The ETF has raised Rs 29,600 crore in its three offerings so far.

Bharat Bond ETF invests only in ‘AAA’ rated bonds of public sector companies. Edelweiss Asset Management is the fund manager of the scheme.

Since its launch in 2019, the ETF’s assets under management (AUM) has crossed the Rs 50,000 crore mark.

Currently, the ETF offers 5 different maturities: 2023, 2025, 2030, 2031 and 2032.

“Our effort has been to extend the maturity period to give investors the flexibility to choose the investment period according to their needs. Also in this tranche, we would seek to give investors a new option to choose the period deadline,” added the official.

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