Executive Summary:
This notification announces the sale/reissue of four Government Stocks (GS) by the Government of India. The auction, conducted by the Reserve Bank of India (RBI) in Mumbai, is scheduled for August 10, 2018, with payment due on August 13, 2018. The total notified amount for the sale is Rs 12,000 crore, with an option to retain additional subscriptions up to Rs 1,000 crore per security.
Key Points / Main Content:
Auction Details:
* Auction conducted by: Reserve Bank of India, Mumbai Office.
* Auction Date: August 10, 2018.
* Bidding Platform: RBI's e-Kuber system.
* Bidding Time: Non-competitive bids: 10:30 a.m. - 11:30 a.m.; Competitive bids: 10:30 a.m. - 12:00 noon.
* Result Announcement: August 10, 2018, at RBI, Mumbai Office.
* Payment Date: August 13, 2018.
Government Stock Information:
* Securities for Sale/Reissue:
* 7.37 GS 2023, maturing on April 16, 2023; Notified Amount: Rs 2,000 crore.
* 7.17 GS 2028, maturing on January 08, 2028; Notified Amount: Rs 4,000 crore.
* 7.40 GS 2035, maturing on September 09, 2035; Notified Amount: Rs 2,000 crore.
* 7.72 GS 2055, maturing on October 26, 2055; Notified Amount: Rs 4,000 crore.
* Total Notified Amount: Rs 12,000 crore.
* Additional Subscription Option: GoI may retain up to Rs 1,000 crore per security.
* Method: Price Multiple based auction.
Allotment and Trading:
* Non-Competitive Bidding: Up to 5% of the notified amount reserved for eligible individuals and institutions.
* When Issued Trading: The stocks are eligible for When Issued trading, as per RBI guidelines.
Interest and Repayment:
* Interest Payment: Half-yearly, based on the nominal value from the original issue date/last coupon payment date.
* Repayment: At par on the maturity date.
* Accrued interest is to be paid on the payment date (August 13, 2018).
Impact Analysis:
Eligible Individuals and Institutions (Non-Competitive Bidders):
* Impact: Opportunity to participate in the auction with a reserved portion of up to 5% of the notified amount.
* Action Required: Submit non-competitive bids between 10:30 a.m. and 11:30 a.m. on August 10, 2018, through the 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 10:30 a.m. and 12:00 noon on August 10, 2018, through the RBI's e-Kuber system.
Reserve Bank of India (RBI):
* Impact: Responsible for conducting the auction and announcing the results.
* Action Required: Conduct the auction on August 10, 2018, and display the results at its Mumbai Office on the same day.
Successful Bidders:
* Impact: Allotment of Government Stocks based on their bids.
* Action Required: Make payment for the allotted stocks, including accrued interest, by August 13, 2018.
Key Entities Referenced
Ministry of Finance: The ministry responsible for financial matters in the Government of India.
Department of Economic Affairs: A department within the Ministry of Finance, Government of India, responsible for economic policy and programs.
Reserve Bank of India: The central bank of India, responsible for conducting auctions for government stocks.
7.37 GS 2023: Government Stock with a coupon rate of 7.37% maturing in 2023.
7.17 GS 2028: Government Stock with a coupon rate of 7.17% maturing in 2028.
7.40 GS 2035: Government Stock with a coupon rate of 7.40% maturing in 2035.
7.72 GS 2055: Government Stock with a coupon rate of 7.72% maturing in 2055.
Mumbai, Maharashtra: The city where the Reserve Bank of India's office is located, which conducts the auctions.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated August 06, 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)
7.37% GS 2023 Apr 16, 2018 05-00-00 Apr 16, 2023 Price Multiple 2,000
7.17% GS 2028 Jan 08, 2018 10-00-00 Jan 08, 2028 Price Multiple 4,000
7.40% GS 2035 Sep 09, 2005 30-00-00 Sep 09, 2035 Price Multiple 2,000
7.72% GS 2055 Oct. 26, 2015 40-00-00 Oct. 26, 2055 Price Multiple 4,000
Subject to the limit of Rs 12000 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 August 10,
2018. Bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking
Solution (E-Kuber) system on August 10, 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 August 10,
2018. The payment by successful bidders will be on August 13, 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 New Stock August 12, 2018 Oct 16 and Apr 16
7.17% GS 2028 7.17 Jul 08, 2018 August 12, 2018 Jan 08 and Jul 08
7.40% GS 2035 7.40 Mar 09, 2018 August 12, 2018 Sep 09 and Mar 09
7.72% GS 2055 7.72 Apr 26, 2018 August 12, 2018 Oct 26 and Apr 26
By Order of the President of India
(Arvind Shrivastava)
Joint Secretary to the Government of India