In a significant move towards enhancing its financial management, the Indian government is actively seeking a specialized advisor for the Bharat Bond Exchange Traded Fund (ETF). This search comes as the fund’s Asset Under Management (AUM) has impressively crossed the Rs 50,000 crore mark.
Launched in 2019, the Bharat Bond ETF represents a critical component of India’s financial landscape, encompassing bonds issued by Central Public Sector Enterprises (CPSEs), Central Public Sector Undertakings (CPSUs), and Central Public Financial Institutions (CPFIs). Since its inception, the fund has played a pivotal role in facilitating these entities to raise a substantial debt of Rs 33,400 crore.
The Department of Investment and Public Asset Management (DIPAM), steering this initiative, released a Request for Proposal (RFP) recently. The aim is to appoint an advisor or consultant with a robust background in managing Exchange Traded Funds (ETFs), Debt ETFs, Debt Mutual Funds, index-linked funds, or in the issuance of corporate bonds. The opportunity is open to a diverse range of financial experts, including merchant bankers, investment bankers, consulting firms, and financial institutions, who can participate either individually or as a consortium.
The selected advisor will be entrusted with a multifaceted role. This includes analyzing and advising on potential strategies for monetizing the debt of selected CPSEs, utilizing market-oriented instruments. A critical part of their mandate will be advising and collaborating with the government for launching new offerings and the effective management or rebalancing of the existing Bharat Bond ETF.
As the fund continues to grow, with its AUM significantly increasing from around Rs 12,000 crore at its launch to over Rs 50,000 crore, the role of the advisor becomes ever more crucial. They will be responsible for monitoring the fund’s performance and submitting a comprehensive half-yearly report on its key statistics.
The Bharat Bond ETF’s journey since 2019 has been noteworthy. Its initial offering helped central public sector enterprises raise Rs 12,400 crore, followed by subsequent tranches in 2020 and 2021, raising Rs 11,000 crore and Rs 6,200 crore, respectively. The fourth tranche in 2022 added another Rs 2,800 crore to the fund’s robust portfolio.
The ETF’s offerings, featuring six maturity dates spanning from 2023 to 2033, highlight its strategic approach to investment and fund management. With the government’s latest move to appoint a seasoned advisor, the Bharat Bond ETF is poised for a new phase of growth and efficiency in managing its burgeoning assets.
Prospective bidders have until December 26 to submit their proposals, marking an exciting opportunity in the realm of financial management and government securities.