**Policy Summary: Auction for Sale of New Government Stock (10-Year Tenure)**
The Government of India, through the Ministry of Finance's Department of Economic Affairs, announces the sale of new Government Stock securities with a 10-year tenure, totaling ₹8,000 crore nominal. The sale will adhere to the terms and conditions outlined in this specific notification, as well as the general notification F. No. 4(13)WM2008, dated October 8, 2008.
The auction will be conducted by the Reserve Bank of India (RBI), Mumbai Office, Fort, Mumbai – 400 001, on May 12, 2017, utilizing a yield-based auction method with multiple price auctioning. Bids must be submitted electronically via the RBI's e-Kuber system on the same date. Non-competitive bids are accepted between 10:30 a.m. and 11:30 a.m., while competitive bids are accepted between 10:30 a.m. and 12:00 noon. Up to 5% of the notified amount will be allotted to eligible individuals and institutions following the Scheme for Non-competitive Bidding Facility in Government Security Auctions (Annex).
The Government Stock has a tenure of ten years, commencing on May 15, 2017, and maturing on May 15, 2027. The securities are eligible for When Issued trading, subject to RBI guidelines.
The coupon rate will be determined by the cutoff yield to maturity rate established during the auction. Interest payments will be made semi-annually on November 15 and May 15. The auction results will be displayed by the RBI at its Mumbai Office on May 12, 2017. Payment by successful bidders is due on May 15, 2017, the date of issue.
For further information, contact Prashant Goyal, Joint Secretary to the Government of India.
Key Entities Referenced
New Government Stock: A new issuance of government stock securities with a 10-year tenure.
Reserve Bank of India: The central bank of India, responsible for conducting the auction and displaying the results.
Mumbai, Maharashtra: The city where the Reserve Bank of India office is located and where the auction results are displayed.
General Notification F. No. 4 13WM2008: A previously issued notification by the Government of India that contains terms and conditions applicable to the stock sale.
Scheme for Noncompetitive Bidding Facility in the Auctions of Government Securities: A scheme that allows eligible individuals and institutions to bid non-competitively for a portion of the government stock.
EKuber: The Core Banking Solution system of the Reserve Bank of India used for submitting bids electronically.
When Issued Trading: A type of trading allowed for the stock before its issue date, according to guidelines issued by the Reserve Bank of India.
Prashant Goyal: Joint Secretary to the Government of India, issuing the order.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated May 08, 2017
NOTIFICATION
Auction for Sale of New Government Stock of 10 year
F. No.4 (7) W&M/2017(i): Government of India hereby notifies sale of New Government Stock
(Securities) of ‘10 year tenure’ 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 12, 2017. Bids for the auction should be submitted in electronic format on the Reserve Bank
of India Core Banking Solution (E-Kuber) system on May 12, 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 ten years tenure commencing from May 15, 2017. The Stock will
be repaid at par on May 15, 2027.
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 12, 2017. The payment by successful bidders will be on May 15, 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 November 15 and May 15.
By Order of the President of India
(Prashant Goyal)
Joint Secretary to the Government of India