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Government may raise Rs 10,000 crore by December through Bharat Bond ETF

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Govt may launch next tranche of Bharat Bond ETF by December

According to a senior finance ministry official, the government may launch the next tranche of Bharat Bond Exchange-Traded Fund (ETF) by December and is expected to raise over Rs 10,000 crore for development plans of central public sector enterprises.

The official said the fund requirements of the CPSEs are being worked out and the third tranche of the ETF will be launched by the end of the calendar year.

“We are finalizing the amount to be raised but it will be more than Rs 10,000 crore,” the official said. Bharat Bond ETF is an exchange traded fund that invests in debt of public sector companies.

The ETF currently invests only in ‘AAA’ rated bonds of public sector companies. Bharat Bond ETF is an exchange traded fund that invests in debt of public sector companies. The ETF currently invests only in ‘AAA’ rated bonds of public sector companies.

The funds raised through debt ETFs help in easing the lending schemes of the participating CPSEs or Public Sector Banks. It also helps them to meet their capital expenditure needs.

The second tranche of Bharat Bond ETF, which was launched in July 2020, was oversubscribed more than three times, collecting around Rs 11,000 crore. It had received around Rs 12,400 crore in its first offering in December 2019.

The Bharat Bond ETF offered maturity options of five and 12 years in its second tranche, while the maturity options in the first tranche were for three and 10 years. Edelweiss Asset Management is the fund manager of the scheme. Edelweiss Asset Management is the fund manager of the scheme.

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