Bharat bond ETF third tranche to open on December 3

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With the government looking to raise over Rs 10,000 crore, the third tranche of Bharat Bond ETF will be open for subscription on December 3, and would close on December 9. Adding to that, the base size of the issue will be Rs 1,000 crore with an open green shoe option.

Bharat Bond ETF is an exchange-traded fund that invests in debt of public sector companies. At present, the ETF invests only in ‘AAA’-rated bonds of public sector companies. Edelweiss Asset Management is the fund manager of the scheme.

Through the debt ETF, the funds raised facilitates in smoothening borrowing plans of the participating CPSEs or public sector banks. It also helps them in meeting their capital expenditure needs.

Second tranche oversubscribed

The latest tranche comes on the back of a successful launch of the initial ETF series in December 2019 and second series in July 2020. Also, the Scheme Information Document (SID) has already been filed with capital markets regulator Sebi.

The second tranche of the Bharat Bond ETF collected Rs 11,000 crore and was oversubscribed by more than three times. It had fetched about Rs 12,400 crore in its debut offer.

While in the first tranche, the maturity options were for three and 10 years. In the second tranche the maturity options offered by the Bharat Bond ETF offered maturity options of five and 12 years.

According to the finance ministry, the government is expecting to raise over Rs 10,000 crore through third tranche to fund growth plans of central public sector enterprises, last month. The total assets under management of Bharat Bond ETF was at over Rs 36,000 crore.