**Policy Summary: Auction for Sale of New Government Stock 2031**
On August 28, 2017, the Government of India, Ministry of Finance, Department of Economic Affairs, announced the sale of new government stock securities with a tenure of 14 years and 13 days for an aggregate amount of ₹9,000 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 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 will take place on September 01, 2017, via the RBI's e-Kuber system. Non-competitive bids are to be submitted between 10:30 a.m. and 11:30 a.m., and competitive bids between 10:30 a.m. and 12:00 noon.
The stock is eligible for When Issued trading, according to RBI guidelines. The Government Stock's tenure commences on September 04, 2017, and will be repaid at par on September 17, 2031. The payment date for successful bidders is September 04, 2017.
The coupon rate will be determined at the cutoff yield to maturity rate decided in the auction. Interest will be payable semi-annually on March 17 and September 17. The auction results will be displayed by the RBI at its Mumbai office on September 01, 2017.
For further information, contact: Prashant Goyal, Joint Secretary to the Government of India.
Key Entities Referenced
Ministry of Finance: The ministry responsible for the financial matters of the Government of India.
Department of Economic Affairs: A department within the Ministry of Finance responsible for economic policy and programs.
New Government Stock 2031: A new government security with a maturity date in the year 2031 being auctioned.
Reserve Bank of India: The central bank of India, responsible for conducting the auction and managing government securities.
Mumbai, Maharashtra: The city and state where the Reserve Bank of India's office is located and where the auction is conducted.
General Notification F.No.413 WM2008: A prior notification issued by the Government of India that contains general terms and conditions related to government stock auctions.
Scheme for Noncompetitive Bidding Facility in the Auctions of Government Securities: A scheme that allows eligible individuals and institutions to participate in government security auctions without placing competitive bids.
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 August 28, 2017
NOTIFICATION
Auction for Sale of New Government Stock 2031
F. No.4 (7) W&M/2017(i): Government of India hereby notifies sale of New Government Stock
(Securities) of ’14 years 13 days tenure’ for an aggregate amount of ` 9,000 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 September 01, 2017. Bids for the auction should be submitted in electronic format on the Reserve
Bank of India Core Banking Solution (E-Kuber) system on September 01, 2017. 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 years thirteen days tenure commencing
from September 04, 2017. The Stock will be repaid at par on September 17, 2031.
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 September 01, 2017. The payment by successful bidders will be on September 04, 2017 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 will be payable half-yearly on March 17 and September 17.
By Order of the President of India
(Prashant Goyal)
Joint Secretary to the Government of India