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) on November 22, 2018. Bids must be submitted electronically through the RBI's e-Kuber system on the auction date. Payment by successful bidders is due on November 26, 2018.
Key Points / Main Content:
* **Auction Details:**
* Auction conducted by: Reserve Bank of India, Mumbai.
* Auction date: November 22, 2018.
* Bidding platform: RBI's e-Kuber system.
* Non-competitive bids: 11:00 a.m. - 12:00 noon.
* Competitive bids: 11:00 a.m. - 12:30 p.m.
* Result display: November 22, 2018, at RBI, Mumbai Office.
* Payment date: November 26, 2018.
* **Government Stocks for Sale/Reissue:**
* 8.24 GS 2027: Maturity Feb 15, 2027; Notified Amount Rs 3,000 Crore.
* 7.17 GS 2028: Maturity Jan 08, 2028; Notified Amount Rs 4,000 Crore.
* 7.50 GS 2034: Maturity Aug 10, 2034; Notified Amount Rs 2,000 Crore.
* 8.13 GS 2045: Maturity Jun 22, 2045; Notified Amount Rs 3,000 Crore.
* Total notified amount limit: Rs 12,000 Crore.
* Additional subscription option: GoI may retain up to Rs 1,000 Crore against any one or more securities.
* **General Conditions**
* Stocks will be sold as per the terms specified in notification F.No.42WM2018, dated March 27, 2018.
* Up to 5% of notified amount allotted to eligible individuals/institutions via non-competitive bidding.
* Stocks are eligible for When Issued trading as per RBI guidelines.
* Interest accrues from the original issue/last coupon payment date, paid semi-annually.
* Stocks repaid at par on maturity.
Impact Analysis:
* **Bidders (Individuals and Institutions):**
* Impact: Opportunity to invest in government securities with varying maturities and interest rates.
* Action Required: Submit bids electronically via RBI's e-Kuber system within the specified timeframes on November 22, 2018, and make payment by November 26, 2018, if the bid is successful.
* **Reserve Bank of India (RBI):**
* Impact: Responsible for conducting the auction and managing the sale/reissue of government stocks.
* Action Required: Conduct the auction on November 22, 2018, display the results, and process payments.
* **Government of India (GoI):**
* Impact: Raising funds through the sale/reissue of government stocks.
* Action Required: Monitor the auction process and exercise the option to retain additional subscriptions if deemed necessary.
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 responsible for economic policy and programs.
Reserve Bank of India: The central bank of India, responsible for conducting auctions of government stocks.
Mumbai, Maharashtra: The city and state where the Reserve Bank of India office is located, which conducts the auction.
Government Stock: Debt instrument issued by the Government of India.
8.24 GS 2027: Government Stock with an interest rate of 8.24% maturing in 2027.
7.17 GS 2028: Government Stock with an interest rate of 7.17% maturing in 2028.
Arvind Shrivastava: Joint Secretary to the Government of India, signatory of the notification.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated November 16, 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)
8.24% GS 2027 Feb 15, 2007 20-00-00 Feb 15, 2027 Price Multiple 3,000
7.17% GS 2028 Jan 08, 2018 10-00-00 Jan 08, 2028 Price Multiple 4,000
7.50% GS 2034 Aug 10, 2004 30-00-00 Aug 10, 2034 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 November 22,
2018. Bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking
Solution (E-Kuber) system on November 22, 2018. The non-competitive bids should be submitted between 11.00
a.m. and 12.00 noon. and the competitive bids should be submitted between 11.00 a.m. and 12.30 p.m.
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 November
22, 2018. The payment by successful bidders will be on November 26, 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)
8.24% GS 2027 8.24 Aug 15, 2018 November 25, 2018 Feb 15 and Aug 15
7.17% GS 2028 7.17 July 08, 2018 November 25, 2018 Jan 08 and July 08
7.50% GS 2034 7.50 Aug 10, 2018 November 25, 2018 Feb 10 and Aug 10
8.13% GS 2045 8.13 Jun 22, 2018 November 25, 2018 Dec 22 and Jun 22
By Order of the President of India
(Arvind Shrivastava)
Joint Secretary to the Government of India