On December 12, 2019, Edelweiss Asset Management Company (AMC), a subsidiary of Edelweiss Capital Limited (ECL) has launched India’s 1st Corporate Bond ETF (exchange trade fund) called the Bharat Bond ETF. It will invest only in AAA-rated bonds of Public Sector companies. Edelweiss AMC proposes to raise a total of up to Rs 15,000 crore through the offer.
i.Edelweiss aims to raise an initial amount of Rs 3,000 crore through this bond from institutional players with a greenshoe option of Rs 2,000 crore in the 3-year maturity period (2023) and Rs 4,000 crore with a greenshoe option of Rs 6,000 crore in the 10-year maturity bucket (2030).
ii.The bond is being open from December 12 -20,2019 for ETF issue subscription. The funds that will come from the investment in this bond will be invested in companies included in the bond index.
iii.Small retail investors will have to invest at least Rs 1,000 in this fund. After this, there is a facility for multiple investment. Here they can invest up to 2 lakhs. At the same time, the minimum amount for anchor investors has been fixed at Rs 10 crore.
iv.This ETF is an initiative of Department of Investment and Public Asset Management DIPAM),Government of India (GoI), and then it mandates Edelweiss AMC to design and manage the product.
Bharat Bond ETF:
It is a kind of mutual fund, which will invest only in bonds issued by government companies.The bond will be listed on the stock exchange, and tradable on exchanges. The funds that will come from investing in this bond will be invested in companies included in this bond index. In such a situation, it is expected to get better returns. It will track the Nifty Bharat bond Target Maturity Indices. BHARAT Bond Funds of Funds (FOF) is also being launched for investors who do not have Demat accounts.
Edelweiss Capital Limited:
Founder– Rashesh Shah
Edelweiss AMC acts as the Investment Manager to Edelweiss Mutual Fund.