Executive Summary:
The Government of India announces the sale/reissue of multiple Government Stocks via auction to be conducted by the Reserve Bank of India (RBI) on December 21, 2018. The total notified amount for the sale is ₹12,000 crore, with an option to retain additional subscriptions up to ₹1,000 crore for each security. Payment by successful bidders is due on December 24, 2018.
Key Points / Main Content:
Auction Details:
* Auction conducted by: Reserve Bank of India, Mumbai Office.
* Auction Date: December 21, 2018.
* Bidding Platform: RBI’s e-Kuber system.
* Non-competitive bids: 11:30 a.m. to 12:00 noon.
* Competitive bids: 11:30 a.m. to 12:30 p.m.
Government Stock Specifics:
* Reissue of multiple Government Stocks with varying maturity dates and coupon rates.
* Stocks include: 6.65 GS 2020, 8.24 GS 2027, 7.95 GS 2032, 7.40 GS 2035, and 8.13 GS 2045.
* Method: Price Multiple.
Allotment and Payment:
* Up to 5% of the notified amount is reserved for non-competitive bidders.
* Payment Date: December 24, 2018.
* Payment includes accrued interest from the original issue/last coupon payment date.
* Interest payable half-yearly; stocks repaid at par on maturity.
Other Conditions:
* Subject to terms in the specific notification and general notification F.No.42WM2018, dated March 27, 2018.
* Stocks are eligible for When Issued trading as per RBI guidelines.
Impact Analysis:
Eligible Individuals and Institutions (Non-Competitive Bidders):
* Impact: Allotment of Government Stock up to 5% of the notified amount.
* Action Required: Submit non-competitive bids between 11:30 a.m. and 12:00 noon on December 21, 2018 via RBI’s e-Kuber system.
Banks, Financial Institutions, and Primary Dealers (Competitive Bidders):
* Impact: Opportunity to acquire Government Stocks through competitive bidding.
* Action Required: Submit competitive bids between 11:30 a.m. and 12:30 p.m. on December 21, 2018 via RBI’s e-Kuber system.
Successful Bidders:
* Impact: Allotment of Government Stocks based on auction results.
* Action Required: Make payment for the allotted stocks, including accrued interest, by December 24, 2018.
Key Entities Referenced
Ministry of Finance: The ministry responsible for economic policy in the Government of India.
Department of Economic Affairs: A department within the Ministry of Finance responsible for advising the government on economic issues.
Government Stock: A type of security issued by the Government of India to raise funds.
Reserve Bank of India: The central bank of India, responsible for conducting auctions of Government Stocks.
Mumbai, Maharashtra: City in India where the Reserve Bank of India's office is located and where the auction is conducted.
Arvind Shrivastava: Joint Secretary to the Government of India, signing the notification.
6.65 GS 2020: A specific Government Stock with a coupon rate of 6.65% maturing in 2020.
8.24 GS 2027: A specific Government Stock with a coupon rate of 8.24% maturing in 2027.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated December 17, 2018
NOTIFICATION
Auction for Sale (Re-issue) of Government Stock (GS)
F.No.4(6)W&M/2018: Government of India(GoI) hereby notifies sale (re-issue) of the following Government Stocks:
Date of Tenure Date of Notified Amount
Name of the Security Base Method
Original Issue (yy-mm-dd) Maturity (in Rs Crore)
6.65% GS 2020 Apr 09, 2018 02-00-00 Apr 09, 2020 Price Multiple 2,000
8.24% GS 2027 Feb 15, 2007 20-00-00 Feb 15, 2027 Price Multiple 2,000
7.95% GS 2032 Aug 28, 2002 30-00-00 Aug 28, 2032 Price Multiple 3,000
7.40% GS 2035 Sep 09, 2005 30-00-00 Sep 09, 2035 Price Multiple 2,000
8.13% GS 2045 Jun 22, 2015 30-00-00 Jun 22, 2045 Price Multiple 3,000
Subject to the limit of `12000 Cr, being total notified amount, GoI will have the option to retain additional subscription
up to `1000 Cr each against any one or more of the above securities. The sale will be subject to the terms and
conditions spelt out in this notification (called ‘Specific Notification’). The Stock will be sold through Reserve Bank of
India, Mumbai Office, Fort, Mumbai- 400 001 as per the terms and conditions specified in the General Notification
F.No.4(2)–W&M/2018, dated March 27, 2018 issued by Government of India.
Allotment to Non-competitive Bidders
2. 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
3. The auction will be conducted by Reserve Bank of India, Mumbai Office, Fort, Mumbai -400 001 on December 21,
2018. Bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking
Solution (E-Kuber) system on December 21, 2018. The non-competitive bids should be submitted between 11.30 a.m.
and 12.00 noon and the competitive bids should be submitted between 11.30 a.m. and 12.30 pm.
When Issued Trading
4. The Stock will be eligible for “When Issued” trading in accordance with the guidelines issued by the Reserve Bank
of India.
Date of issue and payment for the stock
5. The result of the auction shall be displayed by the Reserve Bank of India at its Fort, Mumbai Office on December
21, 2018. The payment by successful bidders will be on December 24, 2018 i.e. the date of re-issue. The payment for
the stocks will include accrued interest on the nominal value of the Stock allotted in the auction from the date of
original issue / last coupon payment date to the date upto which accrued interest is due as mentioned in the table in
para 6.
Payment of Interest and Re-payment of Stock
6. Interest will accrue on the nominal value of the Stock from the date of original issue / last coupon payment and
will be paid half yearly. The Stock will be repaid at par on date of maturity.
Date of Coupon
Name of the Coupon rate Date of Last Coupon Date upto which
payments
Security (%) payment accrued interest is due
(month / date)
6.65% GS 2020 6.65 Oct 09, 2018 Dec 23, 2018 Apr 09 and Oct 09
8.24% GS 2027 8.24 Aug 15, 2018 Dec 23, 2018 Feb 15 and Aug 15
7.95% GS 2032 7.95 Aug 28, 2018 Dec 23, 2018 Feb 28 and Aug 28
7.40% GS 2035 7.40 Sep 09, 2018 Dec 23, 2018 Mar 09 and Sep 09
8.13% GS 2045 8.13 Dec 22, 2018 Dec 23, 2018 Jun 22 and Dec 22
By Order of the President of India
(Arvind Shrivastava)
Joint Secretary to the Government of India