Edelweiss AMC announces second tranche of Bharat Bond ETF – Details

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Published: May 23, 2020 7:12:28 AM

The Bharat Bond ETF had successfully raised over Rs 12,400 crore from a diverse set of investors in its debut offering in December.

The Bharat Bond ETF had successfully raised over Rs 12,400 crore from a diverse set of investors in its debut offering in December.

Edelweiss Asset Management announced on Friday that it will launch the second tranche of the Bharat Bond ETF in July with two new series. The two new Bharat Bond ETF series will have maturities of April 2025 and April 2031.
Through the launch of these 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 ETF will invest in constituents of the Nifty Bharat Bond Indices, consisting of AAA-rated public sector companies.

The Bharat Bond ETF had successfully raised over Rs 12,400 crore from a diverse set of investors in its debut offering in December. After the new fund offer (NFO), the ETF program continued to see healthy investor participation and good liquidity on the exchanges. “The bid-ask spread has stayed in a narrow range of 5 to 10 bps and the daily average traded value in these ETFs has been between `3 and `3.5 crore,” Edelweiss stated.

Radhika Gupta, CEO, Edelweiss Mutual Fund, said Bharat Bond ETF is effective for investors who need safe, liquid, and tax efficient options for their debt. “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,” Gupta said.

Earlier this year, the Reserve Bank of India (RBI) had permitted foreign portfolio investors (FPIs) to invest in exchange traded funds (ETF) that invest in debt instruments.  Market participants had indicated that more fund flows are expected into the Bharat Bond ETF as the new regulation provides foreign portfolio investments with a simpler way to invest in high-quality papers while also helping them diversify exposure.

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