Auctions Scheduled for 18 October 2024
NEW DELHI (Economy India): The Government of India has announced the re-issuance of three long-term government securities (G-Secs) through auctions. These bonds will be auctioned on 18 October 2024 by the Reserve Bank of India (RBI) to raise funds for public spending and other financial needs.
Details of the Government Securities
The notified amounts for each security are as follows:
- 7.02% Government Security 2031 – ₹10,000 crore
- 7.23% Government Security 2039 – ₹13,000 crore
- 7.09% Government Security 2054 – ₹10,000 crore
The government has the option to retain an additional ₹2,000 crore for each bond if demand is higher than expected.
Auction Schedule and Procedure
- Auction Method: Price-based auction using a multiple price method.
- Non-Competitive Bidding: Bids without price competition can be submitted between 10:30 AM and 11:00 AM.
- Competitive Bidding: Bids must be submitted between 10:30 AM and 11:30 AM.
All bids should be made electronically through RBI’s e-Kuber Core Banking Solution platform.
The results of the auction will be announced on 18 October, with payments from successful bidders due by 21 October 2024.
Non-Competitive Bidding Facility
Up to 5% of the total re-issued bonds will be reserved for non-competitive bids. This scheme allows eligible individuals and institutions to participate without competing directly in the auction process.
Bonds Eligible for “When-Issued” Trading
The re-issued securities will qualify for “when-issued” (WI) trading under RBI guidelines. WI trading allows participants to buy and sell bonds before the official issuance date, enhancing market liquidity.
Significance of the Re-Issuance
Government bonds are crucial for financing long-term infrastructure projects and public spending.
An expert commented:
“Re-issuance of these securities ensures liquidity in the market while meeting government funding requirements efficiently.”
Key Takeaways
- ₹33,000 crore worth of government bonds to be auctioned.
- Auctions to take place on 18 October, with payments due by 21 October.
- The bonds will support long-term economic planning and boost investor confidence.
This auction offers investors an opportunity to invest in secure government-backed bonds while providing the government with necessary capital for future projects.
(Economy India)
Source (PIB)
