NEW DELHI: The second tranche of Bharat Bond exchange-traded fund (ETF) opened for subscription on Tuesday. The fund is India’s first corporate debt ETF initiated by the Department of Investment and Public Asset Management (DIPAM) and designed and managed by Edelweiss AMC.
Here are key things to know:
* Similar to the first tranche, which was issued in December 2019, the second tranche is also offering in two variants – a 10-year ETF with maturity in April 2031 and a five-year product with maturity in April 2025. These two maturities are designed for both short-term and long-term investors.
* The issue will be open for subscription for four days — till July 17. Out of the issue, 25 per cent has been reserved for retail investors while the remaining 75 per cent has been kept for retirement funds, Qualified Institutional Buyers (QIBs), and non-institutional investors.
* The minimum investment required for retail investors is Rs 1,001 while the maximum investment is Rs 2 lakh. For non-retail investors, the minimum investment is Rs 2,00,001 and in multiples of Rs 1 thereafter.
* The government aims to raise Rs 3,000 crore, the base issue size with a green-shoe option of Rs 11,000 crore.
* Through bond ETFs, the Centre sells government bonds to the fund, which in turn sells units to investors. These units are traded on the exchanges.
* Currently, Bharat Bond ETFs with maturities in April 2023 and April 2030 are traded on the bourses.
* The ETF will invest in constituents of the Nifty Bharat Bond Indices, consisting of AAA rated public sector companies. Bharat Bond Fund of Funds (FOF) with similar maturities will also be launched for investors, who do not have demat accounts.
(With agency inputs)