Executive Summary:
This notification announces the sale/reissue of various Government of India Stocks via auction on April 5, 2019, through the Reserve Bank of India (RBI). The total notified amount is Rs 17,000 crore, with an option to retain additional subscriptions up to Rs 1,000 crore against any of the securities. Payment by successful bidders is due on April 8, 2019.
Key Points / Main Content:
Auction Details:
* The auction will be conducted by the Reserve Bank of India, Mumbai, on April 5, 2019.
* Bids must be submitted electronically through the RBI's E-Kuber system on April 5, 2019.
* Non-competitive bids: 11:30 a.m. to 12:00 noon.
* Competitive bids: 11:30 a.m. to 12:30 p.m.
Government Stock Specifics:
* Includes the sale/reissue of: 7.00 GS 2021, New GS 2026, GOI FRB 2031, New GS 2039, and 7.72 GS 2055.
* The government may retain additional subscriptions up to Rs 1,000 crore against any one or more of the mentioned securities.
* Stocks are eligible for When Issued trading.
Allotment and Payment:
* Up to 5% of the notified amount will be allotted to eligible individuals/institutions via non-competitive bidding.
* Payment by successful bidders is due on April 8, 2019, including accrued interest.
Interest and Repayment:
* Interest accrues from the date of original issue/last coupon payment and is paid half-yearly.
* Stocks will be repaid at par on the maturity date.
* Coupon rate for securities will be determined at the cutoff yield of the auction.
* For GOI FRB 2031, the interest rate is variable, based on the weighted average yield of the last three 182-day T-Bill auctions plus a fixed spread of 100 basis points.
Impact Analysis:
Investors/Bidders:
Impact: Investors can participate in the auction to purchase government stocks. The specific terms of each stock, including maturity date and interest payment structure, will affect investment decisions.
Action Required: Submit bids through the RBI's E-Kuber system within the specified timeframe on April 5, 2019, and make payments by April 8, 2019, if successful.
Reserve Bank of India (RBI):
Impact: The RBI is responsible for conducting the auction and displaying the results.
Action Required: Conduct the auction on April 5, 2019, announce the results, and manage the payment process.
Government of India:
Impact: The government raises funds through the sale/reissue of these stocks.
Action Required: Monitor the auction results and manage the funds raised.
Key Entities Referenced
Ministry of Finance: The ministry responsible for economic and financial matters in the Government of India.
Department of Economic Affairs: A department within the Ministry of Finance, Government of India, responsible for economic policy and development.
Reserve Bank of India: The central bank of India, responsible for regulating the banking system and managing the country's currency.
Mumbai, Maharashtra: The city where the Reserve Bank of India's office, involved in the auction, is located.
Government Stock: A security issued by the Government of India to borrow money from the public.
GoI FRB 2031: Government of India Floating Rate Bond maturing in 2031.
E-Kuber: The Core Banking Solution system of the Reserve Bank of India used for submitting bids.
Arvind Shrivastava: Joint Secretary to the Government of India, as indicated by the signature at the end of the notification.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated April 1, 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 Rs Crore)
7.00% GS 2021 Jan 21, 2019 02-00-00 Jan 21, 2021 Price Multiple 3,000
New GS 2026 Apr 8, 2019 7-00-00 Apr 8, 2026 Yield Multiple 3,000
GOI FRB 2031 May 07, 2018 13-07-00 Dec 07, 2031 Price Multiple 5,000
New GS 2039 Apr 8, 2019 20-05-07 Sep 15, 2039 Yield Multiple 2,000
7.72% GS 2055 Oct. 26, 2015 40-00-00 Oct. 26, 2055 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 April 5, 2019.
Bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-
Kuber) system on April 5, 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 April 5,
2019. The payment by successful bidders will be on April 8, 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.
Date of Coupon
Name of the Coupon rate Date of Last Coupon Date upto which
payments
Security (%) payment accrued interest is due
(month / date)
7.00% GS 2021 7.00 New Stock Apr 7, 2019 Jul 21 and Jan 21
New GS 2026 Yield Based # New Stock New Stock Oct 8 and Apr 8
GOI FRB 2031 Variable* Dec 7, 2018 Apr 7, 2019 Jun 7 and Dec 7
New GS 2039 Yield Based # New Stock New Stock Sep 15 and Mar 15
7.72% GS 2055 7.72 Oct 26, 2018 Apr 7, 2019 Apr 26 and Oct 26
# 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
* GoI FRB 2031*
(i) The interest at a variable rate will be paid every half-yearly.
(ii) The Floating Rate Bond will carry the coupon, which will have a base rate, equivalent to Weighted Average Yield
(WAY) of last 3 auctions (from the rate fixing day) of 182 Day T-Bills plus a fixed spread, of 100 basis points as
decided by way of auction mechanism. The spread will be fixed throughout the tenure of the bond. The implicit yields
will be computed by reckoning 365 days in a year.(iii) In the event of Government of India 182-day Treasury Bill auctions being discontinued during the currency of the
Bonds, the base rate of the coupon will be the average of Yield to Maturity (YTM) rates prevailing for six month
Government of India Security/ies as on the last three non-reporting Fridays prior to the commencement of the semi-
annual coupon period. In case particular Friday/s is/are holiday/s, the yield to maturity rates as on the previous
working day shall be taken.
(iv) The base rate for the coupon period Dec 7, 2018 to Jun 6, 2019 is 7.05% per annum. Accordingly, the rate of
interest on FRB 2031 for this period shall be 8.05% per annum. The rate of interest payable half yearly on the Bonds
during the subsequent years shall be announced by the Reserve Bank of India before the commencement of the
relative semi-annual coupon period
By Order of the President of India
(Arvind Shrivastava)
Joint Secretary to the Government of India