Executive Summary:
The Government of India announces the sale/issue/reissue of four Government Stocks with varying maturity dates (2024, 2029, 2033, and 2055) via auction. The auction, conducted by the Reserve Bank of India (RBI) in Mumbai, is scheduled for January 25, 2019, with payment due on January 28, 2019. The total notified amount is ₹12,000 Crore, with an option to retain additional subscriptions up to ₹1,000 Crore for any of the securities.
Key Points / Main Content:
* **Auction Details:**
* Auction Date: January 25, 2019, conducted by RBI Mumbai.
* Bidding Platform: RBI's Core Banking Solution E-Kuber system.
* Bidding Timings: Non-competitive bids: 11:30 a.m. - 12:00 noon; Competitive bids: 11:30 a.m. - 12:30 p.m.
* **Government Stock Offerings:**
* New GS 2024: Maturity - January 28, 2024; Notified Amount - ₹3,000 Crore; Base - Yield Multiple
* 7.26 GS 2029: Maturity - January 14, 2029; Notified Amount - ₹4,000 Crore; Base - Price Multiple
* 8.24 GS 2033: Maturity - November 10, 2033; Notified Amount - ₹2,000 Crore; Base - Price Multiple
* 7.72 GS 2055: Maturity - October 26, 2055; Notified Amount - ₹3,000 Crore; Base - Price Multiple
* Total notified amount: ₹12,000 crore with an option to retain additional subscription of ₹1,000 crore
* **Allotment and Payment:**
* Up to 5% of the notified amount is reserved for non-competitive bidders.
* Payment by successful bidders is due on January 28, 2019, including accrued interest.
* **Interest and Repayment:**
* Interest is paid semi-annually on the nominal value from the original issue date/last coupon payment date.
* Stocks will be repaid at par on the maturity date.
* The coupon rate will be determined at the cutoff yield of the auction.
* **Trading:**
* The stocks are eligible for When Issued trading.
Impact Analysis:
* **RBI:**
* Impact: Responsible for conducting the auction and displaying the results.
* Action Required: Conduct the auction on January 25, 2019, through the E-Kuber system, announce results, and manage stock issuance.
* **Bidders (Individuals and Institutions):**
* Impact: Opportunity to invest in Government Stocks with varying maturities.
* Action Required: Submit bids electronically via the E-Kuber system on January 25, 2019, adhering to the specified timelines and payment terms, non-competitive bidders should refer to the Scheme for Noncompetitive Bidding Facility.
* **Government of India:**
* Impact: Raises funds through the issuance of Government Stocks.
* Action Required: Oversee the auction process and manage the funds raised.
Key Entities Referenced
Mumbai, Maharashtra: City in India where the Reserve Bank of India, Mumbai Office is located, which conducts the auctions.
Government Stock: Refers to government securities being auctioned, including 'New GS 2024', '7.26 GS 2029', '8.24 GS 2033', and '7.72 GS 2055'.
General Notification F.No.42WM2018: A general notification issued by the Government of India on March 27, 2018, specifying the terms and conditions for the sale of Government Stock.
Scheme for Noncompetitive Bidding Facility in the Auctions of Government Securities: A scheme allowing eligible individuals and institutions to bid non-competitively in the auctions of government securities.
Arvind Shrivastava: Joint Secretary to the Government of India, signatory of the notification.
Ministry of Finance: The ministry responsible for economic policy, financial regulation and financial institutions in India.
Department of Economic Affairs: A department within the Ministry of Finance responsible for formulating and monitoring economic policies and programs.
Reserve Bank of India: The central bank of India, responsible for conducting auctions and regulating the money supply.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated January 21, 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)
New GS 2024 Jan 28, 2019 05-00-00 Jan 28, 2024 Yield Multiple 3,000
7.26% GS 2029 Jan 14, 2019 10-00-00 Jan 14, 2029 Price Multiple 4,000
8.24% GS 2033 Nov 10, 2014 19-00-00 Nov 10, 2033 Price Multiple 2,000
7.72% GS 2055 Oct. 26, 2015 40-00-00 Oct. 26, 2055 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 25,
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 25, 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 25,
2019. The payment by successful bidders will be on January 28, 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)
New GS 2024 Yield Based # New Stock New Stock July 28 and Jan 28
7.26% GS 2029 7.26 New Stock Jan 27, 2019 July 14 and Jan 14
8.24% GS 2033 8.24 Nov 10, 2018 Jan 27, 2019 May 10 and Nov 10
7.72% GS 2055 7.72 Oct 26, 2018 Jan 27, 2019 Apr 26 and Oct 26
# The coupon rate for the security 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