Bonds

Bharat Bond ETF subscribed by 1.7 times on launch day

Updated : December 13, 2019 06:35 AM IST

The Bharat Bond ETF, with an offer size of Rs 7,000 crore, will invest in a portfolio of bonds of state-run companies and other government entities.

The offer for the ETF, comprising debt of state-run companies, will remain open for all investors from December 13 to December 20.

The New Fund Offer of Bharat Bond ETF, India’s first debt exchange-traded fund (EFT) that was launched on Thursday, was subscribed by 1.7 times for Rs 2,980 crore, the government said.

The anchor book was oversubscribed by 1.7 times @ INR 2980 cr, the secretary of the Department of Investment and Public Asset Management tweeted. The offer for the ETF, comprising debt of state-run companies, will remain open for all investors from December 13 to December 20.

The Bharat Bond ETF, will have a fixed maturity of three and ten years and will trade on the local stock exchange. The ETF, with an offer size of Rs 7,000 crore, will invest in a portfolio of bonds of state-run companies and other government entities.

The launch of the ETF reflects the Narendra Modi government’s push to ease rules for state companies to raise funds through debt instruments and further develop domestic capital markets.

"It is a positive development for retail investors," A Prasanna, head of fixed income research at ICICI Securities Primary Dealership in Mumbai told Reuters.

Research body Crisil said Bharat Bond ETF provides an able professional alternative to generate predictable returns with better liquidity and tax benefits.

Edelweiss Asset Management launched the first tranche of the ETF.

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