Executive Summary:
The Government of India announces the sale/reissue of four Government Stocks via auction to be conducted by the Reserve Bank of India (RBI) in Mumbai on October 26, 2018. Bids must be submitted electronically through the RBI's e-Kuber system on the auction date. Payment by successful bidders is due on October 29, 2018.
Key Points / Main Content:
* **Sale/Reissue of Government Stocks:**
* The following Government Stocks are offered: 7.37 GS 2023, 7.95 GS 2032, 7.40 GS 2035, and 8.13 GS 2045.
* The total notified amount is INR 11,000 crore.
* GoI has the option to retain additional subscriptions up to INR 1,000 crore against any one or more of the listed securities.
* The sale is governed by the terms and conditions in this Specific Notification and the General Notification F.No.42WM2018, dated March 27, 2018.
* **Auction Details:**
* The auction will be conducted by the Reserve Bank of India, Mumbai on October 26, 2018.
* Non-competitive bids should be submitted between 10:30 a.m. and 11:30 a.m.
* Competitive bids should be submitted between 10:30 a.m. and 12:00 noon.
* Up to 5% of the notified amount is allotted to eligible individuals and institutions as per the Scheme for Non-competitive Bidding.
* **Trading and Payment:**
* The Stock is eligible for "When Issued" trading.
* Payment by successful bidders is due on October 29, 2018, and includes accrued interest.
* The result of the auction will be displayed by the Reserve Bank of India at its Fort, Mumbai Office on October 26, 2018.
* **Interest and Repayment:**
* Interest will accrue on the nominal value of the Stock and will be paid half-yearly.
* The Stock will be repaid at par on the date of maturity.
* Accrued interest is due up to October 28, 2018, for all stocks.
* Coupon payment dates are specified for each security (7.37 GS 2023: Apr 16 and Oct 16; 7.95 GS 2032: Feb 28 and Aug 28; 7.40 GS 2035: Mar 09 and Sep 09; 8.13 GS 2045: Dec 22 and Jun 22).
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 through the e-Kuber system between 10:30 a.m. and 11:30 a.m. on October 26, 2018, as per the Scheme for Non-competitive Bidding.
* **Banks, Financial Institutions, and Primary Dealers (Competitive Bidders):**
* Impact: Opportunity to acquire Government Stocks through a competitive bidding process.
* Action Required: Submit competitive bids through the e-Kuber system between 10:30 a.m. and 12:00 noon on October 26, 2018.
* **Successful Bidders:**
* Impact: Allotment of Government Stocks.
* Action Required: Make payment for the allotted stocks, including accrued interest, by October 29, 2018.
* **Reserve Bank of India (RBI):**
* Impact: Responsible for conducting the auction and displaying the results.
* Action Required: Conduct the auction on October 26, 2018, display the results at its Mumbai office, and manage the payment process.
Key Entities Referenced
Ministry of Finance: A department of the Government of India responsible for economic and financial matters.
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 stocks.
Mumbai: The city in Maharashtra State where the Reserve Bank of India office that conducts the auction is located.
Government Stock: Debt instrument issued by the Government of India.
7.37 GS 2023: Government Stock with a coupon rate of 7.37% maturing in 2023.
7.95 GS 2032: Government Stock with a coupon rate of 7.95% maturing in 2032.
8.13 GS 2045: Government Stock with a coupon rate of 8.13% maturing in 2045.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated October 22, 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 ` Crore)
7.37% GS 2023 Apr 16, 2018 05-00-00 Apr 16, 2023 Price Multiple 3,000
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 `11000 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 October 26,
2018. Bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking
Solution (E-Kuber) system on October 26, 2018. 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
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 October 26,
2018. The payment by successful bidders will be on October 29, 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)
7.37% GS 2023 7.37 Oct 16, 2018 October 28, 2018 Apr 16 and Oct 16
7.95% GS 2032 7.95 Aug 28, 2018 October 28, 2018 Feb 28 and Aug 28
7.40% GS 2035 7.40 Sep 09, 2018 October 28, 2018 Mar 09 and Sep 09
8.13% GS 2045 8.13 Jun 22, 2018 October 28, 2018 Dec 22 and Jun 22
By Order of the President of India
(Arvind Shrivastava)
Joint Secretary to the Government of India