Edelweiss Launches Bharat Bond ETF, Targets Rs 15,000 Crore
Indian five hundred rupee banknotes are arranged for a photograph in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Edelweiss Launches Bharat Bond ETF, Targets Rs 15,000 Crore

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Edelweiss Asset Management Company Thursday launched the country's maiden corporate bond exchange traded fund though which it aims to raise up to Rs 15,000 crore.

Called Bharat Bond ETF, it will invest in AAA-rated bonds of public sector companies.

"Through the ETF, we proposes to raise an initial amount of Rs 3,000 crore with a green shoe option of Rs 2,000 crore in the three-year maturity period (2023) and Rs 4,000 crore with a green shoe option of Rs 6,000 crore in the 10- year maturity bucket (2030)," Edelweiss Mutual Fund Chief Executive Radhika Gupta said.

This ETF is an initiative of the department of investment and public asset management and the latter has given the mandate to Edelweiss AMC to design and manage the product.

Gupta said the ETF will have a unique target maturity structure designed for fixed income investors, looking for predictability of returns in their debt investments, she said.

The ETF with a three-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.

It will provide safety to investors as it consists of a high quality basket of public sector companies, liquidity and access at a much lower ticket size, compared to investment in individual bonds.

The company has also launched Bharat bond funds of funds for investors who do not have demat accounts.

The subscription opens on Dec. 12 and closes on 20 post which the bonds will be traded on the bourses.

Earlier this month, the Cabinet had approved the launch of ETF for bonds to create an additional source of funding for Central public sector units and state-owned financial institutions.

On Wednesday insurance regulator, Irdai allowed insurance companies to invest in debt ETFs of central units.

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