Bharat Bond ETF's second tranche coming in July; aims to garner up to Rs 14,000 cr

Edelweiss Asset Management on Friday said it will launch the second tranche of Bharat Bond ETF in July, with two new series, to raise up to Rs 14,000 crore.

This comes after the successful launch of the initial series of the ETF in December 2019.

Through the launch of the two new ETF series, Edelweiss Mutual Fund proposes to raise an initial amount of Rs 3,000 crore with a green shoe option of Rs 11,000 crore based on market demand, the fund house said in a statement.

The two new series will have maturities of April 2025 and April 2031.

The Bharat Bond ETF program is a government initiative and Edelweiss AMC has been given the mandate to design and manage the product.

"The launch is in line with our vision to create a ladder of Bharat Bond ETFs across various maturities on the yield curve. This will provide more options for investors to match their investment needs with different time horizons,” Radhika Gupta, CEO of Edelweiss Mutual Fund said.

"In the current environment, investors need safe, liquid, and tax efficient options for their debt investments, and Bharat Bond ETF meets this need effectively. We are happy that investors in the first series of Bharat Bond ETF have had a good experience and the AUM of these series has also increased organically after the launch,” she added.

The ETF will invest in constituents of the Nifty Bharat Bond Indices, consisting of AAA-rated public sector companies.

Bharat Bond Funds of Funds (FOF) with similar maturities will also be launched for investors, who do not have demat accounts, the fund house said.

The first tranche of Bharat Bond ETF raised over Rs 12,400 crore, from a diverse set of investors. Further, after the new fund offer (NFO), the Bharat Bond ETF program continued to see healthy investor participation and good liquidity on the exchanges.