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Rollout of Bharat Bond ETF’s third tranche in the works


New Delhi: The government is working towards launching the third tranche of Bharat Bond exchange traded fund (ETF), said a senior official. The Bharat Bond ETF invests in debt of central public sector enterprises and has seen high interest from investors in the past two tranches.

“We are working towards getting the third tranche,” said the official, who did not wish to be identified. He said the government was in the process of identifying the right time and the CPSEs that would be involved. CPSEs have plans to raise about Rs 12,000 crore.

The first tranche of Bharat Bond ETF raised Rs 12,400 crore in December last year with maturity options of three and 10 years. However, the second tranche in July was oversubscribed more than three times, collecting about Rs 11,000 crore. The maturity options were five years and 12 years. The ETF invested in constituents of the Nifty Bharat Bond Indices, consisting of AAA-rated public sector companies.

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The funds raised through the debt ETF help CPSEs meet their capital expenditure needs. The Bharat Bond ETF is based on CPSE corporate bonds and is aimed at helping deepening bond market in India.

The government may consider including AA-rated bonds in the future which will further help in this direction.

The government has set a disinvestment target of Rs 2.1 lakh crore for this financial year, of which Rs 1.2 lakh crore is expected from strategic divestments.

So far, it has raised Rs 5,695 crore from offers for sale and Rs 10,992 crore from the Bharat Bond ETF, according to data with the Department of Investment and Asset Management (DIPAM).

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While the government will be focusing on initial public offers and share buybacks in key PSEs in the remaining months of this financial year, equity ETF indulging CPSE-ETF or Bharat 22 ETF for disinvestment of equity shares will not be the preferred option, DIPAM secretary TK Pandey had earlier said.





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