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Indian govt to release fourth tranche of Bharat bond ETF tomorrow; Check subscription period, maturity date, yield, more

New Delhi: The fourth tranche of India’s first corporate bond exchange-traded fund (ETF) is set to be launched this week, Edelweiss Mutual Fund, which manages the ETF, said on Thursday. The new fund offer of the ETF, which invests only in AAA-rated corporate bonds issued by state-run companies, will open on Dec. 2 and close for subscription on Dec. 8. The first offering of the ETF was launched in late 2019. Through the latest tranche, Edelweiss Mutual Fund plans to raise at least 10 billion rupees ($123.29 million), with a greenshoe option to retain an additional 40 billion rupees.

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This series will mature in April 2033 and offer a yield-to-maturity of 7.50%, the fund house said. The latest ETF will include papers issued by National Bank for Agriculture and Rural Development, National Highways Authority of India, Power Finance Corp and NTPC among others.

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Edelweiss, which designs and manages ETFs on behalf of the government, has so far launched ETFs through three tranches with total assets under management of over 500 billion rupees. In the last one year these ETFs have generated returns in the range of 2% to 4% as on Nov. 30, the fund house said. Fund managers have said returns on debt schemes have been impacted this year due to aggressive rate hikes from the central bank.

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