Bharat Bond ETF Oversubscribed 1.7 Times; Garners Rs 12,000 Crore
Indian five hundred rupee banknotes are arranged for a photograph in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Bharat Bond ETF Oversubscribed 1.7 Times; Garners Rs 12,000 Crore

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The ambitious Bharat Bond exchange traded fund has closed for subscription on Friday with over-subscription of 1.7 times, garnering Rs 12,000 crore to be utilised for capex of public sector undertakings.

The base size of issue is 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 oversubscribed approximately 1.7 times, collecting about Rs 12,000 crore. Information is subject to further update," Department of Investment and Public Asset Management 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 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.

The yield as on Dec. 5, of Nifty Bharat Bond Index-April 2023 is 6.69 percent and the Nifty Bharat Bond Index-April 2030 is 7.58 percent.

The investors who hold these ETFs for over three 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 is also being launched for investors who do not have demat accounts.

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