Govt may raise over Rs 10,000 cr via Bharat Bond ETF in Q1 next fiscal

The government is planning to launch the third tranche of the Bharat Bond ETF during the first quarter of the next fiscal and expects to raise over Rs 10,000 crore from retail investors to fund growth plans of Central Public Sector Enterprises, sources said.

The government is planning to launch the third tranche of the Bharat Bond ETF during the first quarter of the next fiscal and expects to raise over Rs 10,000 crore from retail investors to fund growth plans of Central Public Sector Enterprises, sources said. Bharat Bond ETF is an exchange traded fund that invests in debt of public sector companies. The ETF currently invests only in 'AAA' rated bonds of public sector companies. 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. According to sources, the third tranche of Rs 10,000-15,000 crore is expected to hit the market in the April-June quarter of 2021-22. The second tranche of the Bharat Bond ETF, which was launched in July 2020, was oversubscribed more than 3 times, collecting about Rs 11,000 crore. It had fetched about Rs 12,400 crore in its debut offer in December 2019. The Bharat Bond ETF offered maturity options of 5 and 12 years in its second tranche, while in the first tranche, maturity options were for 3 and 10 years. Recently, the government allowed the EPFO and provident fund trusts to invest money in units of public sector debt exchange traded funds (ETFs), like the Bharat Bond ETF. Edelweiss Asset Management is the official fund manager of the scheme.