Bharat Bond ETF oversubscribed 1.7 times; garners Rs 12,000 crore

The ambitious Bharat Bond ETF has closed for subscription on Friday with over-subscription of 1.7 times, garnering Rs 12,000 crore to be utilised for capex of PSUs.

The base size of issue of Rs 7,000 crore.

"India's first corporate Bond ETF, Bharat Bond ETF, has received a great response from investors across different segments. The issue was over-subscribed approximately 1.7 times, collecting about Rs 12,000 crore. Information is subject to further update," DIPAM Secretary Tuhin Kanta Pandey said in a late evening tweet.

The exchange-traded fund will invest only in AAA-rated bonds of public sector companies and will have target maturity structures.

The ETF with a 3-year maturity will follow the Nifty Bharat Bond Index-April 2023 and the one with a 10-year maturity will follow the Nifty Bharat Bond Index-April 2030.

The yield as on 5 December 2019, of Nifty Bharat Bond Index-April 2023 is 6.69 per cent and the Nifty Bharat Bond Index-April 2030 is 7.58 per cent.

The investors who hold these ETFs for over 3 years will get the benefit of capital gains with indexation.

The ETF will invest in constituents of the Nifty Bharat Bond Indices, consisting of public sector companies. Bharat Bond Funds of Funds (FOF) is also being launched for investors who do not have demat accounts.