**Policy Summary: Auction for Sale of New Government Stock of 13 Year Tenure**
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 13-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 prescribed in the General Notification F. No. 4/13/WM/2008, dated October 8, 2008.
Up to 5% of the notified amount will be allotted to eligible individuals and institutions under the Scheme for Non-competitive Bidding Facility. The auction is scheduled for December 23, 2016. Non-competitive bids must 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 stock is eligible for When Issued (WI) trading, subject to RBI guidelines. The tenure of the Government Stock is 13 years, commencing from December 26, 2016, with repayment at par on December 26, 2029. The date of issue and payment for the stock is December 26, 2016. The coupon rate will be determined by the cutoff yield to maturity rate established in the auction. Interest will be payable semi-annually on June 26 and December 26.
The auction results will be displayed by the RBI at its Mumbai Office on December 23, 2016.
Key Entities Referenced
Ministry of Finance: The ministry within the Government of India responsible for economic and financial matters.
Department of Economic Affairs: A department within the Ministry of Finance, Government of India.
New Delhi: The location of the Budget Division of the Department of Economic Affairs, which is the capital of India.
Reserve Bank of India: The central bank of India, responsible for conducting the auction and related activities.
Mumbai, Maharashtra: The city in which the Reserve Bank of India's office is located where the auction will be conducted.
Government Stock: Securities being auctioned by the Government of India.
General Notification F. No. 4 13WM2008: A notification issued by the Government of India on October 8, 2008, that contains general terms and conditions applicable to the stock sale.
Prashant Goyal: The Joint Secretary to the Government of India who signed the notification.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated December 19, 2016
NOTIFICATION
Auction for Sale of New Government Stock of 13 Year
F. No.4 (3) W&M/2016(i): Government of India hereby notifies sale of New Government
Stock (Securities) of ’13 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 December 23, 2016. Bids for the auction should be submitted in electronic
format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on December
23, 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 ’13 year’ tenure commencing from December 26, 2016.
The Stock will be repaid at par on December 26, 2029.
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 December 23, 2016. The payment by successful bidders will be on
December 26, 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 will be payable half-yearly on June 26, and December 26.
By Order of the President of India
(Prashant Goyal)
Joint Secretary to the Government of India