Executive Summary:
The Government of India announces the sale/reissue of various Government Stocks via auction to be conducted by the Reserve Bank of India (RBI) on January 18, 2019. Bids must be submitted electronically through the RBI's e-Kuber system on the auction date. Payment by successful bidders is due on January 21, 2019.
Key Points / Main Content:
* **Auction Details:**
* Auction conducted by: Reserve Bank of India, Mumbai.
* Auction date: January 18, 2019.
* Bidding platform: RBI’s e-Kuber system.
* Non-competitive bids: 11:30 a.m. to 12:00 noon.
* Competitive bids: 11:30 a.m. to 12:30 p.m.
* **Government Stock Offerings:**
* New GS 2021 maturing on January 21, 2021: ₹2,000 crore, Yield Multiple, Original Issue 8.24
* GS 2027 maturing on February 15, 2027: ₹2,000 crore, Price Multiple, Original Issue 7.95
* GS 2032 maturing on August 28, 2032: ₹3,000 crore, Price Multiple, Original Issue 7.40
* GS 2035 maturing on September 09, 2035: ₹2,000 crore, Price Multiple, Original Issue 7.06
* GS 2046 maturing on October 10, 2046: ₹3,000 crore, Price Multiple
* Government has the option to retain additional subscription up to ₹1,000 crore against any one or more securities, subject to a total notified amount limit of ₹12,000 crore.
* **Allotment and Trading:**
* Up to 5% of the notified amount will be allotted to eligible individuals/institutions via the Non-Competitive Bidding Facility.
* The Stock will be eligible for When Issued trading.
* **Payment and Interest:**
* Payment date: January 21, 2019.
* Payment includes accrued interest from the original issue/last coupon payment date.
* Interest will be paid half-yearly.
* Stocks will be repaid at par on maturity.
Impact Analysis:
* **Successful Bidders:**
* Impact: Obligation to pay for the allotted stock including accrued interest by January 21, 2019.
* Action Required: Ensure funds are available for payment by the specified date.
* **Reserve Bank of India (RBI):**
* Impact: Responsible for conducting the auction, displaying results, and managing the payment process.
* Action Required: Conduct the auction on January 18, 2019, and manage the settlement process.
* **Eligible Individuals and Institutions (Non-Competitive Bidders):**
* Impact: Opportunity to receive allotment of Government Stock up to 5% of the notified amount.
* Action Required: Submit non-competitive bids between 11:30 a.m. and 12:00 noon on January 18, 2019.
Key Entities Referenced
Ministry of Finance: The ministry within the Government of India responsible for economic and financial matters.
Department of Economic Affairs: A department under the Ministry of Finance responsible for advising the government on economic issues.
Budget Division: A division within the Department of Economic Affairs.
Government Stock: A type of security issued by the Government of India to raise funds.
Reserve Bank of India: The central bank of India, responsible for conducting auctions and managing government securities.
Mumbai, Maharashtra: The city in which the Reserve Bank of India's office that conducts the auctions is located.
EKuber: The Core Banking Solution system of the Reserve Bank of India used for submitting bids in electronic format.
Arvind Shrivastava: Joint Secretary to the Government of India, signing the notification.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated January 14, 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:
Name of the Security Date of Tenure Date of Base Method Notified Amount
Original Issue (yy-mm-dd) Maturity (in Rs Crore)
New GS 2021 Jan 21, 2019 02-00-00 Jan 21, 2021 Yield Multiple 2,000
8.24% GS 2027 Feb 15, 2007 20-00-00 Feb 15, 2027 Price Multiple 2,000
7.95% GS 2032 Aug 28, 2002 30-00-00 Aug 28, 2032 Price Multiple 3,000
7.40% GS 2035 Sep 09, 2005 30-00-00 Sep 09, 2035 Price Multiple 2,000
7.06% GS 2046 Oct 10, 2016 30-00-00 Oct 10, 2046 Price Multiple 3,000
Subject to the limit of `12000 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 January 18,
2019. Bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking
Solution (E-Kuber) system on January 18, 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 January 18,
2019. The payment by successful bidders will be on January 21, 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 July 21 and Jan 21
8.24% GS 2027 8.24 Aug 15, 2018 Jan 20, 2019 Feb 15 and Aug 15
7.95% GS 2032 7.95 Aug 28, 2018 Jan 20, 2019 Feb 28 and Aug 28
7.40% GS 2035 7.40 Sep 09, 2018 Jan 20, 2019 Mar 09 and Sep 09
7.06% GS 2046 7.06 Oct 10, 2018 Jan 20, 2019 Apr 10 and Oct 10
# 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