Govt may raise Rs 100 bn via Bharat Bond ETF by December 2022: Report

The second tranche of the Bharat Bond ETF, which was launched in July 2020, was oversubscribed more than three times, collecting about Rs 11,000 crore. It had fetched about Rs 12,400 crore in its debut offer in December 2019.

In its second tranche, it offered maturity options of five and 12 years in its second tranche, while in the first tranche, maturity options were for three and 10 years.

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

Bharat Bond ETF is an open-ended exchange traded bond fund investing in bonds issued by constituents of the Nifty Bharat Bond Indices, consisting of 'AAA' rated public sector companies. In these ETFs, the underlying securities are held until the maturity of the scheme.

This is exclusively managed by the Edelweiss Asset Management Company.

They are said to offer stable returns and higher safety. In this, the ETF invests the money in public sector bonds. The fund have a fixed maturity date when investors get back their money along with returns. One can also buy/sell on the stock exchange.

One can invest in the fund through the website or by filling in the application form during the offer period. The fund will predominantly invest money in the constituents of Nifty BHARAT Bond Index. It will be listed on the exchange.

Investors can buy and sell on the exchange any time before its maturity.