Executive Summary:
The Government of India announces the sale/reissue of several government stocks via auction conducted by the Reserve Bank of India (RBI) on July 5, 2019. The total notified amount is Rs. 17,000 crore. Payment by successful bidders is due on July 8, 2019.
Key Points / Main Content:
* **Auction Details:**
* Auction conducted by: Reserve Bank of India, Mumbai Office.
* Date of Auction: July 5, 2019.
* Bidding Platform: RBI's E-Kuber system.
* Bidding Timelines: Non-competitive bids: 11:30 a.m. - 12:00 noon; Competitive bids: 11:30 a.m. - 12:30 p.m.
* **Government Stock Details:**
* Reissue of multiple Government Stocks with varying maturity dates and coupon rates (7.32 GS 2024, 7.26 GS 2029, 7.69 GS 2043, 7.72 GS 2049).
* Total notified amount: Rs. 17,000 crore.
* GoI has the option to retain additional subscription up to Rs. 1,000 crore against any one or more securities.
* **Allotment and Payment:**
* Up to 5% of the notified amount is reserved for allotment to non-competitive bidders.
* Payment Date: July 8, 2019.
* Payment includes accrued interest from the original issue/last coupon payment date.
* **Interest and Repayment:**
* Interest is paid half-yearly.
* Stocks will be repaid at par on the maturity date.
Impact Analysis:
* **Bidders (Individuals and Institutions):**
* *Impact:* Opportunity to invest in government securities with varying maturities and coupon rates.
* *Action Required:* Submit bids electronically via RBI's E-Kuber system within the specified timelines on July 5, 2019, and make payments by July 8, 2019, if the bid is successful. Non-competitive bidders should refer to the Scheme for Noncompetitive Bidding Facility.
* **Reserve Bank of India (RBI):**
* *Impact:* Responsible for conducting the auction and displaying the results.
* *Action Required:* Conduct the auction on July 5, 2019, display the results at its Mumbai Office, and manage the allotment and payment processes.
* **Government of India (GoI):**
* *Impact:* Raising funds through the sale/reissue of government stocks.
* *Action Required:* Oversee the auction process and manage the funds raised.
Key Entities Referenced
E-Kuber: The Core Banking Solution system of the Reserve Bank of India used for submitting bids in electronic format.
Ministry of Finance: The ministry responsible for economic policy, financial regulation and other financial matters of the government.
Department of Economic Affairs: A department within the Ministry of Finance, Government of India.
Reserve Bank of India: The central bank of India, responsible for conducting auctions for government stock.
Mumbai Office, Maharashtra: The specific branch of the Reserve Bank of India located in Mumbai, responsible for conducting the auction.
Government Stock: Refers to government securities being reissued and sold through auction.
Arvind Shrivastava: Joint Secretary to the Government of India, signing the notification.
General Notification F.No.42WM2018: A prior notification issued by the Government of India, dated March 27, 2018, containing general terms and conditions for the sale of Government Stock.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated July 1, 2019
NOTIFICATION
Auction for Sale (re-issue) of Government Stock (GS)
F.No.4(6)W&M/2019: 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)
7.32% GS 2024 Jan 28, 2019 05-00-00 Jan 28, 2024 Price Multiple 5,000
7.26% GS 2029 Jan 14, 2019 10-00-00 Jan 14, 2029 Price Multiple 6,000
7.69% GS 2043 Apr 30, 2019 24-01-17 Jun 17, 2043 Price Multiple 2,000
7.72% GS 2049 Apr 15, 2019 30-02-00 Jun 15, 2049 Price Multiple 4,000
Subject to the limit of Rs.17000 Cr, being total notified amount, GoI will have the option to retain additional
subscription up to Rs.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 July 5, 2019.
Bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-
Kuber) system on July 5, 2019. 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 July 5, 2019.
The payment by successful bidders will be on July 8, 2019 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.
Name of the Coupon rate Date of Last Coupon Date upto which Date of Coupon
Security (%) payment accrued interest is due payments (month /
date)
7.32% GS 2024 7.32 New Security July 7, 2019 Jul 28 and Jan 28
7.26% GS 2029 7.26 New Security July 7, 2019 Jul 14 and Jan 14
7.69% GS 2043 7.69 June 17, 2019 July 7, 2019 Dec 17 and Jun 17
7.72% GS 2049 7.72 June 15, 2019 July 7, 2019 Dec 15 and Jun 15
By Order of the President of India
(Arvind Shrivastava)
Joint Secretary to the Government of India