NSE launches Nifty Bharat Bond Index series to track 'AAA' rated bonds

The National Stock Exchange on Thursday launched Nifty Bharat Bond Index series, which will track a portfolio of AAA-rated bonds issued by government entities.

The first two indices in the series are for April 2023 and April 2030.

On Wednesday, the Cabinet approved the launch of exchange-traded fund (ETF) for bonds to create an additional source of funding for central public sector companies and state-owned financial institutions.

The new fund offer (NFO) of the ETF is expected be launched during December itself.

Each such index would capture performance of portfolio of public sector bonds with 'AAA' rating and maturing in a specific year, the bourse said in a release.

The indices have a base date of November 29, 2019, and a base value of 1,000. They would be re-balanced or reconstituted at the end of every calendar quarter.

Sources said NHAI, NHPC, NTPC, REC, PFC and Nuclear Power Corporation of India Ltd would be in the index.

The series has been launched by the exchange's index services subsidiary NSE Indices Ltd.

NSE Managing Director and Chief Executive Officer Vikram Limaye said the exchange takes pride in working with the Department of Investment and Public Asset Management (DIPAM) and other stakeholders in developing the index series that would be tracked by Bharat Bond ETF.

The ETF would be a basket of bonds issued by state firms or any government organisation. The unit size would be of Rs 1,000, allowing small investors to invest, Finance Minister Nirmala Sitharaman said on Wednesday.