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Second tranche of Bharat Bond ETF anticipates raising 14,000 crore

On May 22, Edelweiss Asset Management said that they have decided to launch the second tranche of Bharat Bond ETF in July aimed at raising 14,000 crores through investors. The first tranche of Bharat Bond ETF or Exchange Traded Fund was rolled out in December last year which yielded Rs 12,400 Crore.

The second tranche will be launched in two series. The two series will have the maturity of April 2025 and April 2031. Edelweiss Mutual Fund is anticipating that these two series will raise initially an amount of Rs.3,000 crore and an additional of Rs.11, 000 crores based on market demand by allowing the option of Green Shoe Investment to the investors.

In one of the releases of the Fund House, it said that the Bharat Bond ETF program is witnessing healthy investor participation and liquidity on exchanges is good. The bid-ask spread remained in a narrow range of 5 to 10 Basis Point. The daily average traded value in these ETFs has between a range of Rs. 3 crore to Rs.3.50 crore and that makes it one of the more liquid ETFs in India.

According to Edelweiss Mutual Fund CEO, Radhika Gupta, the launch of the second tranche is a part of their vision to create a ladder of Bharat Bond ETFs across various maturities on the yield curve. It will facilitate investors with more options to match their different investment needs with different time horizons.

The Bond ETF invests in constituents of Nifty Bond Indices which consists of AAA-rated Public Sector Companies such as Power Grid, EXIM Bank, NTPC etc. For investors not having Demat account to be eligible to invest in maturities of Bharat Bond ETFs will be provided with a similar type of maturities by the Edelweiss Mutual Fund through the introduction of Bharat Bond Funds of Funds (FOF) in market.

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