Bharat Bond ETF Debuts At National Stock Exchange
The ETF saw an over-subscription of 1.7 times, garnering Rs 12,000 crore which is likely to be utilised for capital expenditure of public sector undertakings.
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The units of the ambitious Bharat Bond exchange-traded fund (ETF) issued by Edelweiss Asset Management got listed at the National Stock Exchange (NSE) on Thursday.
Last month, the ETF saw an over-subscription of 1.7 times, garnering Rs 12,000 crore which is likely to be utilised for capital expenditure of public sector undertakings. The issue was open for subscription between December 12 to December 20. The base size of the issue was Rs 7,000 crore. The ETF will invest only in AAA-rated bonds of public sector companies and will have target maturity structures. 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 (FOF) is also being launched for investors who do not have demat accounts.
In the first week of December, the Union Cabinet had approved the launch of India's first bond ETF which can be bought and sold like any listed security on the bourses.
The Bharat Bond ETF will be made of AAA-rated papers issued by government-linked companies to start with and will come in two maturities -- three and 10 years.
Market experts say the move will help increase the interest of retail investors in the debt market, which gives a predictable set of returns with minimum to no risk.