The new fund offer, which opened on December 3, recorded an oversubscription of 6.2 times against the base issue size of Rs 1,000 crore.
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The third tranche of Bharat Bond ETF (BBE3) has received an “overwhelming response” with collections crossing Rs 6,200 crore, Edelweiss Mutual Fund MD and CEO Radhika Gupta said on December 9.
BBE3, managed by Edelweiss Asset Management Company, recorded an oversubscription of over 6.2 times against the base issue size of Rs 1,000 crore, Gupta noted.
The new fund offer had opened on December 3 and closed after six days on December 9.
“We are delighted to see the overwhelming response that Edelweiss MF BHARAT Bond ETF series III (with one April 2032 maturity) has received with collections crossing Rs 6,200 crore,” she said.
“The issue has oversubscribed by more than 6.2x against the base issue size of Rs 1,000 crores. The total AUM of this category has reached around Rs 55,000 crore and Edelweiss AMC is a leader in this space with more than 80 percent market share,” Gupta added.
Notably, BBE3’s units will mature on April 15, 2032. The ETF will track the Nifty Bharat Bond Index April 2032. Put simply, the ETF will buy CPSE bonds maturing within one year before the date of maturity. The yield of the underlying index as on November 2, 2021, stands at 6.87 percent. The index constituents include eight CPSEs (central public sector enterprises) with 15 percent weight given to each of the top five firms.
Gains earned on the units of BBE3, if held till maturity, will give the investor indexation benefits for 11 years. Gains on debt fund units held for more than three years are taxed at 20 percent after indexation. The interest earned on those bonds will be taxed at the marginal rate. Also, investors have to look for means to reinvest the interest received. The mutual fund structure takes care of both issues.
