Edelweiss Asset Management Company said on Tuesday it will launch the second tranche of Bharat Bond exchange traded fund (ETF) in July. It plans to raise up to ₹14,000 crore through the launch of two new series with maturities of April 2025 and April 2031.
Edelweiss Mutual Fund plans to raise an initial amount of ₹3,000 crore with a green shoe option to retain over-subscription of up to ₹11,000 crore, based on market demand.
The ETF will invest in constituents of the Nifty Bharat Bond Indices, consisting of AAA-rated public sector companies. Bharat Bond Funds of Funds, with similar maturities, will also be launched for investors without demat accounts.
The government has given Edelweiss AMC the mandate to design and manage the Bharat Bond ETF programme.
Radhika Gupta, CEO, Edelweiss Mutual Fund, said that after an overwhelming response to the first tranche of the scheme last December, the new launch is set to create a ladder of Bharat Bond ETFs across various maturities on the yield curve. This will provide more options for investors to match their investment needs with different time horizons, she said.
In the current environment, investors need safe, liquid, and tax efficient options for their debt investments and Bharat Bond ETF meets this need effectively, said a release.
The first tranche had raised over ₹12,400 crore last December from a diverse set of investors. Further, after the NFO, the programme continued to see healthy investor participation and good liquidity on the exchanges, it added.
The bid-ask spread has stayed in a narrow range of 5 to 10 bps and the daily average traded value in these ETFs has been between ₹3 crore and 3.5 crore, making it one of the more liquid ETFs in India, said the release.