Executive Summary:
The Government of India announces the sale/reissue of government stocks via auction on April 13, 2018, through the Reserve Bank of India (RBI). The total notified amount is Rs 12000 crore, with an option to retain additional subscriptions up to Rs 1000 crore against any one or more of the securities. Payment by successful bidders is due on April 16, 2018.
Key Points / Main Content:
Auction Details:
* Auction conducted by RBI, Mumbai, on April 13, 2018.
* Bids to be submitted electronically via RBI's e-Kuber system on April 13, 2018.
* Non-competitive bids: 10.30 a.m. and 11.30 a.m.
* Competitive bids: 10.30 a.m. and 12.00 noon.
* Auction results displayed by RBI, Mumbai, on April 13, 2018.
Stock Details:
* Government Stocks being sold/reissued:
* NI GS 2023
* 6.68 GS 2031
* 7.73 GS 2034
* 7.06 GS 2046
* Accrued interest is applicable from the date of original issue/last coupon payment date up to the date accrued interest is due, as specified.
* Interest payable half-yearly; Stock repaid at par on maturity date.
* Coupon rate will be determined by the cutoff yield to maturity in the auction.
Allotment to Non-Competitive Bidders:
* Up to 5% of the notified amount reserved for eligible individuals and institutions via the Scheme for Non-competitive Bidding.
Payment and Interest:
* Payment due on April 16, 2018, including accrued interest.
* Interest paid half-yearly based on nominal value from original issue/last coupon payment date.
Trading Information:
* The Stock is eligible for When Issued trading, following RBI guidelines.
Impact Analysis:
Bidders (Individuals and Institutions):
* Impact: Opportunity to acquire government stocks through competitive and non-competitive bidding processes.
* Action Required: Submit bids electronically through RBI's e-Kuber system within specified timeframes on April 13, 2018, and make payments by April 16, 2018, if successful.
Reserve Bank of India (RBI):
* Impact: Responsible for conducting the auction, displaying results, and managing the allotment and payment processes.
* Action Required: Conduct the auction on April 13, 2018, announce results, and facilitate payment settlements on April 16, 2018.
Government of India (GoI):
* Impact: Raises funds through the sale/reissue of government stocks.
* Action Required: Monitor the auction process and manage the funds raised.
Holders of Government Stocks:
* Impact: Receive interest payments on their holdings and repayment of the stock at par on the maturity date.
* Action Required: Monitor interest payments and maturity dates for repayment.
Key Entities Referenced
Ministry of Finance: The ministry responsible for economic policy and financial regulation of 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 regulating the banking system and managing the country's currency.
New Delhi: The capital of India, where the Ministry of Finance is located.
Mumbai, Maharashtra: A city in India where the Reserve Bank of India's office is located which conducts the auction.
Government Stock: A debt instrument issued by the Government of India to raise funds.
E-Kuber: The Core Banking Solution system of the Reserve Bank of India, used for submitting auction bids.
Prashant Goyal: Joint Secretary to the Government of India, as indicated in the document.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated April 09, 2018
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)
NI GS 2023 Apr 16, 2018 05-00-00 Apr 16, 2023 Yield Multiple 3000
6.68% GS 2031 Sep 04, 2017 14-00-13 Sep 17, 2031 Price Multiple 4000
7.73% GS 2034 Oct 12, 2015 19-02-07 Dec 19, 2034 Price Multiple 2000
7.06% GS 2046 Oct 10, 2016 30-00-00 Oct 10, 2046 Price Multiple 3000
Subject to the limit of Rs 12000 Cr, being total notified amount, GoI will have the option to retain additional
subscription up to Rs 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 26, 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 13, 2018.
Bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-
Kuber) system on April 13, 2018. The non-competitive bids should be submitted between 10.30 a.m. and 11.30 a.m.
and the competitive bids should be submitted between 10.30 a.m. and 12.00 noon.
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 13,
2018. The payment by successful bidders will be on April 16, 2018 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 of 5 year New Stock# New Stock New Stock Apr 16 and Oct 16
6.68% GS 2031 6.68 Mar 17, 2018 Apr 15, 2018 Mar 17 and Sep 17
7.73% GS 2034 7.73 Dec 19, 2017 Apr 15, 2018 Jun 19 and Dec 19
7.06% GS 2046 7.06 April 10, 2018 Apr 15, 2018 Oct 10 and Apr 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
(Prashant Goyal)
Joint Secretary to the Government of India