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Bharat Bond ETF anchor quota subscribed 1.7 times

India's first corporate bond exchange-traded fund (ETF), Bharat Bond ETF's, anchor investor quota was subscribed 1.7 times on Thursday. Anchor investors included private and public banks, private and public insurers as well as foreign portfolio investors among others.

ETMarkets.com|
Updated: Dec 12, 2019, 08.26 PM IST
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MUMBAI: India's first corporate bond exchange-traded fund (ETF), Bharat Bond ETF's, anchor investor quota was subscribed 1.7 times on Thursday.

Anchor investors included private and public banks, private and public insurers as well as foreign portfolio investors among others.

Bharat Bond ETF, which is also the country’s largest new fund offer (NFO) ever, opened for subscription on Thursday. The ETF is a government initiative and Edelweiss AMC was given the mandate to design and manage the product.

Edelweiss AMC proposes to raise a total of up to Rs 15,000 crore through the offer. It plans to raise an initial amount of Rs 3,000 crore with a greenshoe option of Rs 2,000 crore in the 3-year maturity period and Rs 4,000 crore with a greenshoe option of Rs 6,000 crore in the 10-year maturity bracket.

The expense ratio of this ETF is the lowest in India and also the lowest for any debt fund in the world at 0.0005 per cent. The ETF will invest only in AAA-rated bonds of public sector undertakings (PSUs).

It will have target maturity structures. The 3-year maturity ETF will follow the Nifty Bharat Bond index -April 2023 and the one with the 10-year maturity period will follow Nifty Bharat Bond Index - April 2030.

The yield on both these bonds as on December 5 was 6.69 per cent and 7.58 per cent respectively.

Bharat Bond Funds of Funds is also being launched for investors who do not hold demat accounts.

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