**Policy Summary: Reissue of 7.73 per cent Government Stock 2034**
On July 4, 2016, the Government of India, Ministry of Finance, Department of Economic Affairs, announced the sale reissue of the 7.73 per cent Government Stock 2034 for an aggregate amount of ₹2,000 crore nominal. The sale was conducted by the Reserve Bank of India (RBI), Mumbai Office, via a price-based auction using the multiple price auction method.
Up to 5% of the notified amount was allotted to eligible individuals and institutions through a non-competitive bidding facility. The auction took place on July 8, 2016, with non-competitive bids submitted between 10:30 a.m. and 11:30 a.m., and competitive bids between 10:30 a.m. and 12:00 noon via the RBI’s e-Kuber system.
The stock was eligible for When Issued trading, adhering to RBI guidelines. It had a tenure of 19 years, 2 months, and 7 days, commencing from October 12, 2015, and was repaid at par on December 19, 2034.
The auction results were displayed by the RBI on July 8, 2016, at its Mumbai Office. Payment by successful bidders was due on July 11, 2016, including accrued interest from June 19, 2016, to July 10, 2016. Interest at 7.73 per cent per annum accrues on the nominal value, payable semi-annually on December 19 and June 19.
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, Government of India.
7.73 per cent Government Stock 2034: A specific government stock being reissued.
Reserve Bank of India: The central bank of India, responsible for conducting the auction.
Mumbai Office, Fort, Mumbai, Maharashtra: The specific branch office of the Reserve Bank of India conducting the auction.
General Notification F. No. 4 13 WM2008, dated October 8, 2008: A general notification providing the overall terms and conditions
Scheme for Noncompetitive Bidding Facility in the Auctions of Government Securities: A scheme allowing eligible individuals and institutions to bid non-competitively.
Prashant Goyal: Joint Secretary to the Government of India.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated July 04 2016
NOTIFICATION
Auction for Sale (Re-issue) of 7.73 per cent Government Stock 2034
F.No.4(3)W&M/2016(ii):Government of India hereby notifies sale (re-issue) of ‘7.73 per cent
Government Stock 2034 (hereinafter called 'the Stock') for an aggregate amount of ` 2,000 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 price 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
July 8, 2016. Bids for the auction should be submitted in electronic format on the Reserve Bank of India
Core Banking Solution (E-Kuber) system on July 8, 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 “19 Years, 2 months and 7 days” tenure commencing from
October 12, 2015. The Stock will be repaid at par on December 19, 2034.
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
July 8, 2016. The payment by successful bidders will be on July 11, 2016. i.e. the date of re-issue. The
payment for the Stock will include accrued interest on the nominal value of the Stock allotted in the
auction from the date of last coupon payment i.e. June 19, 2016 to July 10, 2016.
Interest
8. Interest at the rate of 7.73 per cent per annum will accrue on the nominal value of the Stock from date
of last coupon payment and will be paid half-yearly on December 19 and June 19.
By Order of the President of India
(Prashant Goyal)
Joint Secretary to the Government of India