**Policy Summary: Auction for Sale of New Government Stock (14 years)**
This notification, issued by the Government of India, Ministry of Finance, Department of Economic Affairs, announces the sale of new Government Stock securities with a 14-year tenure for an aggregate amount of ₹8,000 crore (Nominal). The sale will be conducted by the Reserve Bank of India (RBI), Mumbai Office, Fort, Mumbai-400 001, through a yield-based auction using a multiple price auction method, as per the guidelines outlined in General Notification F. No. 4(13)WM2008, dated October 8, 2008.
Up to 5% of the notified amount will be allotted to eligible individuals and institutions through a non-competitive bidding facility. The auction is scheduled for May 6, 2016. Non-competitive bids are to be submitted electronically via the RBI's e-Kuber system between 10:30 a.m. and 11:30 a.m., and competitive bids between 10:30 a.m. and 12:00 noon on the same day.
The Government Stock will have a tenure of 14 years, commencing from May 9, 2016, and will be repaid at par on May 9, 2030. The stock is eligible for When Issued trading, according to RBI guidelines.
The coupon rate will be determined by the cutoff yield to maturity rate established in the auction. Interest will be payable semi-annually on November 9 and May 9. The result of the auction will be displayed by the RBI at its Mumbai Office on May 6, 2016, and payment by successful bidders is due on May 9, 2016.
For further information, contact Joint Secretary to the Government of India, Prashant Goyal.
Key Entities Referenced
Ministry of Finance: The ministry responsible for financial matters in the Government of India.
Department of Economic Affairs: A department within the Ministry of Finance responsible for economic policy and related matters.
New Government Stock: A type of government security being offered for sale.
Reserve Bank of India: The central bank of India, responsible for conducting the auction and related activities.
Mumbai, Maharashtra: The city where the Reserve Bank of India office is located and where the auction is conducted.
General Notification F. No. 4 13WM2008: A previously issued notification providing general terms and conditions for government stock sales.
Scheme for Noncompetitive Bidding Facility in the Auctions of Government Securities: A scheme allowing eligible individuals and institutions to bid for a portion of the government stock without competitive bidding.
Prashant Goyal: 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 May 2, 2016
NOTIFICATION
Auction for Sale of New Government Stock 14 years
F. No.4 (3) W&M/2016(i): Government of India hereby notifies sale of New Government
Stock (Securities) of 14 years for an aggregate amount of ` 8,000 crore (nominal). The sale
will be subject to the terms and conditions spelt out in this notification (called ‘Specific
Notification’) as also the terms and conditions specified in the General Notification F. No. 4
(13)–W&M/2008, dated October 8, 2008 issued by Government of India.
Method of Issue
2. The Stock will be sold through Reserve Bank of India, Mumbai Office, Fort, Mumbai- 400
001 in the manner as prescribed in paragraph 5.1 of the General Notification F. No. 4 (13)–
W&M/2008, dated October 8, 2008 by a yield based auction using multiple price auction
method.
Allotment to Non-competitive Bidders
3. 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
4. The auction will be conducted by Reserve Bank of India, Mumbai Office, Fort, Mumbai-
400 001 on May 6, 2016. Bids for the auction should be submitted in electronic format on the
Reserve Bank of India Core Banking Solution (E-Kuber) system on May 6, 2016. 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
5. The Stock will be eligible for “When Issued” trading in accordance with the guidelines
issued by the Reserve Bank of India.
Tenure
6. The Government Stock will be of fourteen tenure commencing from May 9, 2016. The
Stock will be repaid at par on May 9, 2030.
Date of issue and payment for the stock
7. The result of the auction shall be displayed by the Reserve Bank of India at its Fort,
Mumbai Office on May 6, 2016. The payment by successful bidders will be on May 9, 2016
i.e. the date of issue.
Interest
8. The coupon rate for the securities will be set at the cut-off yield to maturity rate decided in
the auction. The interest thereafter will be payable half-yearly on November 9 and May 9.
By Order of the President of India
(Prashant Goyal)
Joint Secretary to the Government of India