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Second tranche of Bharat Bond ETF likely to hit market within this quarter: FM Sitharaman

PTI     February 2, 2020

Finance Minister Nirmala Sitharaman on Sunday said the second tranche of Bharat Bond exchange traded fund (ETF) is likely to hit the market in the current quarter.

The first bond ETF, launched in December, was a great success.

"I am going for the second (tranche of Bharat Bond ETF) and expecting success in that also," she said.

When asked about whether the issuance will take place during the current fiscal, the finance minister said, "I hope so".

Bharat Bond ETF, India's first-ever corporate bond exchange traded fund with a fixed maturity of 3 years and 10 years, fetched about Rs 12,400 crore from its debut offer.

The Bharat Bond new fund offer (NFO) received great response from investors with the issue subscribed nearly 1.8 times. The base size of the issue was Rs 7,000 crore.

Bond ETF was a part of government's effort to deepen bond market. Sitharaman in her second budget on Saturday again emphasised on deepening of the market and announced new measures.

"Certain specified categories of Government securities would be opened fully for non-resident investors, apart from being available to domestic investors as well.

"The limit for FPI (foreign portfolio investor) in corporate bonds, currently at 9 per cent of outstanding stock, will be increased to 15 per cent of the outstanding stock of corporate bonds," she had said.

Bharat Bond ETF provides an additional source of funding for Central Public Sector Undertakings (CPSUs), Central Public Sector Enterprises (CPSEs), Central Public Financial Institutions (CPFIs) and other government organisations.

It also provides a better opportunity to retail investors for participation in quality public sector bonds at an affordable cost.

Also read: Bharat Bond ETF receives great response; over-subscribed 1.7 times, collects Rs 12,000 crore

Also read: Bharat Bond ETF raises Rs 12,395 crore; issue oversubscribed 1.8 times

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