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 February 01, 2019. Bids must be submitted electronically through the RBI's e-Kuber system on the auction date. Payment by successful bidders is due on February 04, 2019.
Key Points / Main Content:
Auction Details:
* Auction Date: February 01, 2019, by the Reserve Bank of India (RBI), Mumbai.
* Bidding: Electronic format via RBI's e-Kuber system.
* Non-competitive bids: 11:30 a.m. - 12:00 noon.
* Competitive bids: 11:30 a.m. - 12:30 p.m.
* Payment Date: February 04, 2019.
Government Stocks for Sale/Reissue:
* 7.00 GS 2021: Maturity - Jan 21, 2021; Notified Amount - ₹2,000 Crore.
* 8.24 GS 2027: Maturity - Feb 15, 2027; Notified Amount - ₹2,000 Crore.
* GOI FRB 2031: Maturity - Dec 07, 2031; Notified Amount - ₹3,000 Crore.
* 7.40 GS 2035: Maturity - Sep 09, 2035; Notified Amount - ₹2,000 Crore.
* 8.17 GS 2044: Maturity - Dec 01, 2044; Notified Amount - ₹3,000 Crore.
* Total Notified Amount Limit: ₹12,000 Crore.
* Additional Subscription: GoI may retain up to ₹1,000 Crore against any one or more securities.
Interest and Repayment:
* Interest accrues from the original issue date/last coupon payment date.
* Interest is paid semi-annually.
* Stocks are repaid at par on the maturity date.
* Accrued interest is payable on Feb 03, 2019, for all listed stocks.
Non-Competitive Bidding:
* Up to 5% of the notified amount is allotted to eligible individuals/institutions.
* As per the Scheme for Non-competitive Bidding Facility.
Other Details:
* The sale is subject to terms and conditions in this Specific Notification and General Notification F.No.42WM2018, dated March 27, 2018.
* Stocks are eligible for When Issued trading, per RBI guidelines.
Impact Analysis:
Eligible Individuals and Institutions (Non-Competitive Bidders):
* Impact: Opportunity to acquire Government Stocks through the non-competitive bidding process, with up to 5% of the notified amount reserved.
* Action Required: Submit non-competitive bids electronically via RBI's e-Kuber system between 11:30 a.m. and 12:00 noon on February 01, 2019, according to the Scheme for Non-competitive Bidding Facility.
Banks, Financial Institutions, and Other Competitive Bidders:
* Impact: Opportunity to participate in the auction for Government Stocks.
* Action Required: Submit competitive bids electronically via RBI's e-Kuber system between 11:30 a.m. and 12:30 p.m. on February 01, 2019. Ensure payment by February 04, 2019, if the bid is successful.
Reserve Bank of India (RBI):
* Impact: Responsible for conducting the auction, displaying results, and managing payments.
* Action Required: Conduct the auction on February 01, 2019, announce the results at its Mumbai office on the same day, and process payments from successful bidders by February 04, 2019.
Key Entities Referenced
Government Stock: A type of security issued by the Government of India.
Reserve Bank of India: The central bank of India, responsible for conducting the auction and displaying the results.
Mumbai, Maharashtra: The city where the Reserve Bank of India office is located and where the auction results are displayed.
7.00 GS 2021: Government Stock with a 7.00% coupon rate maturing in 2021.
8.24 GS 2027: Government Stock with a 8.24% coupon rate maturing in 2027.
GOI FRB 2031: Government of India Floating Rate Bond maturing in 2031.
7.40 GS 2035: Government Stock with a 7.40% coupon rate maturing in 2035.
8.17 GS 2044: Government Stock with a 8.17% coupon rate maturing in 2044.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated January 28, 2019
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 ` Crore)
7.00% GS 2021 Jan 21, 2019 02-00-00 Jan 21, 2021 Price Multiple 2,000
8.24% GS 2027 Feb 15, 2007 20-00-00 Feb 15, 2027 Price Multiple 2,000
GOI FRB 2031 May 07, 2018 13-07-00 Dec 07, 2031 Price Multiple 3,000
7.40% GS 2035 Sep 09, 2005 30-00-00 Sep 09, 2035 Price Multiple 2,000
8.17% GS 2044 Dec 01, 2014 30-00-00 Dec 01, 2044 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 February 01,
2019. Bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking
Solution (E-Kuber) system on February 01, 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 February 01,
2019. The payment by successful bidders will be on February 04, 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.
Date of Coupon
Name of the Coupon rate Date of Last Coupon Date upto which
payments
Security (%) payment accrued interest is due
(month / date)
7.00% GS 2021 7.00 New Stock Feb 03, 2019 July 21 and Jan 21
8.24% GS 2027 8.24 Aug 15, 2018 Feb 03, 2019 Feb 15 and Aug 15
GOI FRB 2031 Variable* Dec 07, 2018 Feb 03, 2019 Jun 07 and Dec 07
7.40% GS 2035 7.40 Sep 09, 2018 Feb 03, 2019 Mar 09 and Sep 09
8.17% GS 2044 8.17 Dec 01, 2018 Feb 03, 2019 June 01 and Dec 01
* GoI FRB 2031*
(i) The interest at a variable rate will be paid every half-yearly.
(ii) The Floating Rate Bond will carry the coupon, which will have a base rate, equivalent to Weighted Average Yield
(WAY) of last 3 auctions (from the rate fixing day) of 182 Day T-Bills plus a fixed spread, of 100 basis points as
decided by way of auction mechanism. The spread will be fixed throughout the tenure of the bond. The implicit yields
will be computed by reckoning 365 days in a year.(iii) In the event of Government of India 182-day Treasury Bill auctions being discontinued during the currency of the
Bonds, the base rate of the coupon will be the average of Yield to Maturity (YTM) rates prevailing for six month
Government of India Security/ies as on the last three non-reporting Fridays prior to the commencement of the semi-
annual coupon period. In case particular Friday/s is/are holiday/s, the yield to maturity rates as on the previous
working day shall be taken.
(iv) The base rate for the coupon period Dec 7, 2018 to Jun 6, 2019 is 7.05% per annum. Accordingly, the rate of
interest on FRB 2031 for this period shall be 8.05% per annum. The rate of interest payable half yearly on the Bonds
during the subsequent years shall be announced by the Reserve Bank of India before the commencement of the
relative semi-annual coupon period.
By Order of the President of India
(Arvind Shrivastava)
Joint Secretary to the Government of India