Govt seeks to raise Rs 14,000 cr from second tranche of Bharat Bond ETF

Two new series will have maturities of April 2025 and April 2031.

The government will be launching the second tranche of Bharat Bond ETF, seeking to raise Rs 14,000 crore in July.

The two new Bharat Bond ETF series will have maturities of April 2025 and April 2031. The base issue size of the ETF is Rs 3,000 crore, with a green shoe option of Rs 11,000 crore based on market demand.

"After an overwhelming response to the first tranche of Bharat Bond ETF in December last year, we are excited to announce this next tranche of two new maturity series. 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," said Radhika Gupta, chief executive officer of Edelweiss Mutual Fund (MF).

Edelweiss MF was given the mandate to manage Bharat Bond ETF by the Department of Investment and Public Asset Management.

The ETF will invest in constituents of the NIFTY BHARAT Bond Indices, consisting of AAA rated public sector units (PSUs). Bharat Bond Fund-of-Funds (FOF) with similar maturities will also be launched for investors, who do not have demat accounts.

Unlike other government ETFs, where investors can invest in equity shares of diverse government PSUs, Bharat Bond ETF allows investors to take exposure to a portfolio of debt papers of government PSUs.

The first launch of Bharat Bond ETF had raised over Rs 12,400 crore.