Government of India Announces Auction of Dated Securities worth ₹30,000 Crore

Dated Securities

The Government of India (GOI) has recently announced the auction of three dated securities for a total notified amount of ₹30,000 crore. The details of the auction are as follows:

  1. 7.33% GS 2026: This security has a repayment date of October 30, 2026, with a notified amount of ₹8,000 crore. The auction for this security will take place on February 16, 2024 (Friday), and the settlement date will be on February 20, 2024 (Tuesday).
  2. 7.18% GS 2037: With a repayment date of July 24, 2037, this security has a notified amount of ₹10,000 crore.
  3. 7.25% GS 2063: This security has a repayment date of June 12, 2063, and a notified amount of ₹12,000 crore.

The Government of India has the option to retain additional subscriptions up to ₹2,000 crore for each of the mentioned securities.

The auction will be conducted through the Reserve Bank of India Mumbai Office, located in Fort, Mumbai. The sale will adhere to the terms and conditions specified in the ‘Specific Notification’ mentioned above, as well as the General Notification F.No.4(2)–W&M/2018, dated March 27, 2018.

The auction process will involve using the uniform price method for 7.33% GS 2026 and 7.18% GS 2037, while the multiple price method will be employed for 7.25% GS 2063. Interested bidders can submit both competitive and non-competitive bids in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on February 16, 2024.

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Non-competitive bids can be submitted between 10:30 a.m. and 11:00 a.m., and competitive bids can be submitted between 10:30 a.m. and 11:30 a.m. The auction results will be announced on the same day, and successful bidders are required to make their payments on February 20, 2024.

Additionally, ‘Primary Dealers’ have the opportunity to submit bids for underwriting the Additional Competitive Underwriting (ACU) portion from 09:00 a.m. to 09:30 a.m. on February 16, 2024.

The stocks being auctioned will be eligible for “When Issued” trading from February 13 to February 16, 2024.

About Dated Securities

Dated Securities, also known as Government Bonds, are debt instruments issued by the Government of India (GOI) to raise funds. They are considered low-risk investments with guaranteed returns of both principal and interest. Here’s a quick breakdown:

Key points:

  • Maturity: Range from 5 to 40 years.
  • Interest: Fixed or floating (paid half-yearly).
  • Types: Different tenors and coupon rates available.
  • Issued by: Reserve Bank of India (RBI) on behalf of GOI.
  • Safe investment: Backed by the government, considered reliable.
  • Liquidity: Traded on the secondary market.
  • Tax implications: Subject to income tax.

Source: Auction of Government of India Dated Securities

Last Updated on 4 months

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