**Policy Summary: Reissue of 7.73% Government Stock 2034**
On November 7, 2016, the Government of India, Ministry of Finance, Department of Economic Affairs, announced the sale and reissue of the 7.73% 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, through a price-based auction using a multiple price auction method.
Up to 5% of the notified amount was allotted to eligible individuals and institutions via a non-competitive bidding facility. The auction took place on November 11, 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 on the RBI's e-Kuber system.
The stock is eligible for When Issued trading, had a tenure of 19 years, 2 months, and 7 days commencing from October 12, 2015, and will be repaid at par on December 19, 2034. The payment date for successful bidders was November 15, 2016, inclusive of accrued interest from June 19, 2016, to November 14, 2016. Interest at 7.73% per annum is payable semi-annually on December 19 and June 19.
The notification was issued by Prashant Goyal, Joint Secretary to the Government of India.
Key Entities Referenced
7.73 per cent Government Stock 2034: Government security being reissued through auction.
Reserve Bank of India: The central bank of India, responsible for conducting the auction.
Mumbai, Maharashtra: City in India where the Reserve Bank of India office is located and auction is conducted.
General Notification F. No. 4 13 WM2008, dated October 8, 2008: A general notification providing terms and conditions for government stock auctions.
Scheme for Noncompetitive Bidding Facility in the Auctions of Government Securities: A scheme that allows eligible individuals and institutions to bid non-competitively in government security auctions.
Reserve Bank of India Core Banking Solution EKuber: Electronic platform used for submitting bids in the auction.
When Issued Trading: Trading mechanism applicable to the government stock, subject to Reserve Bank of India guidelines.
Prashant Goyal: Joint Secretary to the Government of India.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated November 07, 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
November 11, 2016. Bids for the auction should be submitted in electronic format on the Reserve Bank
of India Core Banking Solution (E-Kuber) system on November 11, 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
November 11, 2016. The payment by successful bidders will be on November 15, 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 November 14, 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