Executive Summary:
The Government of India announces the sale/reissue of multiple Government Stocks via auction to be conducted by the Reserve Bank of India (RBI) in Mumbai on July 12, 2019. The total notified amount is ₹17,000 crore. Payment by successful bidders is due on July 15, 2019.
Key Points / Main Content:
Auction Details:
* Auction conducted by: Reserve Bank of India, Mumbai Office.
* Auction date: July 12, 2019.
* Bidding submission via RBI's E-Kuber system on July 12, 2019.
* Non-competitive bids: 11:30 a.m. to 12:00 noon.
* Competitive bids: 11:30 a.m. to 12:30 p.m.
* Auction result displayed: July 12, 2019, at RBI Mumbai Office.
Stock Information:
* Government Stocks for sale/reissue include: New GS 2021, 7.27 GS 2026, 7.57 GS 2033, 7.62 GS 2039, and 7.63 GS 2059.
* Tenure and maturity dates specified for each stock.
* Total notified amount: ₹17,000 crore.
* Government has the option to retain additional subscription up to ₹1,000 crore against any one or more securities.
* Stocks are eligible for When Issued trading.
Payment and Interest:
* Payment due date: July 15, 2019.
* Payment includes accrued interest from the original issue/last coupon payment date.
* Interest payable half-yearly.
* Stocks repaid at par on maturity date.
* Coupon rate set at the cutoff yield to maturity rate decided in the auction.
Non-Competitive Bidding:
* Up to 5% of the notified amount allotted to eligible individuals and institutions via non-competitive bidding.
Impact Analysis:
Bidders (Individuals and Institutions):
* Impact: Opportunity to acquire Government Stocks.
* Action Required: Submit bids electronically via RBI's E-Kuber system within specified timelines and ensure payment on July 15, 2019, if the bid is successful. Non-competitive bidders should refer to the Scheme for Noncompetitive Bidding Facility.
Reserve Bank of India (RBI):
* Impact: Responsible for conducting the auction and displaying results.
* Action Required: Conduct the auction on July 12, 2019, display results, and manage the allotment and payment processes.
Government of India:
* Impact: Raises funds through the sale/reissue of Government Stocks.
* Action Required: Monitor the auction process and exercise the option to retain additional subscription if needed.
Key Entities Referenced
Ministry of Finance: The ministry responsible for economic policy, financial affairs and taxation in the Government of India.
Department of Economic Affairs: A department within the Ministry of Finance responsible for advising the government on economic matters.
Reserve Bank of India: The central bank of India, responsible for conducting auctions for government stocks.
Mumbai Office, Reserve Bank of India: The specific branch of the Reserve Bank of India located in Mumbai, responsible for conducting the auction.
Government Stock: Debt instruments issued by the Government of India.
New GS 2021: A specific government stock maturing in 2021.
7.27 GS 2026: A specific government stock with a 7.27% coupon rate maturing in 2026.
F.No.42WM2018: General Notification issued by Government of India, dated March 27, 2018 regarding terms and conditions.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated July 8, 2019
NOTIFICATION
Auction for Sale (issue/re-issue) of Government Stock (GS)
F.No.4(6)W&M/2018: Government of India(GoI) hereby notifies sale (issue/re-issue) of the following Government
Stocks:
Date of Tenure Date of Notified Amount
Name of the Security Base Method
Original Issue (yy-mm-dd) Maturity (in ` Crore)
New GS 2021 New Stock 02-00-00 Jul 15, 2021 Yield Multiple 3,000
7.27% GS 2026 Apr 8, 2019 07-00-00 Apr 8, 2026 Price Multiple 3,000
7.57% GS 2033 May 20, 2019 14-00-27 Jun 17, 2033 Price Multiple 5,000
7.62% GS 2039 Apr 8, 2019 20-05-07 Sep 15, 2039 Price Multiple 2,000
7.63% GS 2059 May 6, 2019 40-01-11 Jun 17, 2059 Price Multiple 4,000
Subject to the limit of `17000 Cr, being total notified amount, GoI will have the option to retain additional subscription
up to `1000 Cr each against any one or more of the above securities. The sale will be subject to the terms and
conditions spelt out in this notification (called ‘Specific Notification’). The Stock will be sold through Reserve Bank of
India, Mumbai Office, Fort, Mumbai- 400 001 as per the terms and conditions specified in the General Notification
F.No.4(2)–W&M/2018, dated March 27, 2018 issued by Government of India.
Allotment to Non-competitive Bidders
2. The Government Stock up to 5% of the notified amount of the sale will be allotted to eligible individuals and
institutions as per the enclosed Scheme for Non-competitive Bidding Facility in the Auctions of Government Securities
(Annex).
Place and date of auction
3. The auction will be conducted by Reserve Bank of India, Mumbai Office, Fort, Mumbai -400 001 on July 12, 2019.
Bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-
Kuber) system on July 12, 2019. The non-competitive bids should be submitted between 11.30 a.m. and 12.00 noon
and the competitive bids should be submitted between 11.30 a.m. and 12.30 pm.
When Issued Trading
4. The Stock will be eligible for “When Issued” trading in accordance with the guidelines issued by the Reserve Bank
of India.
Date of issue and payment for the stock
5. The result of the auction shall be displayed by the Reserve Bank of India at its Fort, Mumbai Office on July 12,
2019. The payment by successful bidders will be on July 15, 2019 i.e. the date of issue/re-issue. The payment for the
stocks will include accrued interest on the nominal value of the Stock allotted in the auction from the date of original
issue / last coupon payment date to the date upto which accrued interest is due as mentioned in the table in para 6.
Payment of Interest and Re-payment of Stock
6. Interest will accrue on the nominal value of the Stock from the date of original issue / last coupon payment and
will be paid half yearly. The Stock will be repaid at par on date of maturity.
Name of the Coupon rate Date of Last Coupon Date upto which Date of Coupon
Security (%) payment accrued interest is due payments
(month / date)
New GS 2021 Yield Based # New Stock New Stock Jan 15 and Jul 15
7.27% GS 2026 7.27 New Stock July 14, 2019 Oct 8 and Apr 8
7.57% GS 2033 7.57 Jun 17, 2019 July 14, 2019 Dec 17 and Jun 17
7.62% GS 2039 7.62 New Stock July 14, 2019 Sep 15 and Mar 15
7.63% GS 2059 7.63 Jun 17, 2019 July 14, 2019 Dec 17 and Jun 17
# The coupon rate for the securities will be set at the cut-off yield to maturity rate decided in the auction. The interest
will be payable half-yearly
By Order of the President of India
(Arvind Shrivastava)
Joint Secretary to the Government of India