**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 September 28, 2018. The total notified amount is Rs. 12000 crore, with an option to retain additional subscriptions up to Rs. 1000 crore for each security. Payment by successful bidders is due on October 1, 2018.
**Key Points / Main Content:**
* **Securities Offered:**
* 7.37 GS 2023, maturing on April 16, 2023 (Reissue of Original Issue on Apr 16, 2018) - Rs 2,000 crore
* 7.17 GS 2028, maturing on January 08, 2028 (Reissue of Original Issue on Jan 08, 2018) - Rs 4,000 crore
* 7.40 GS 2035, maturing on September 09, 2035 (Reissue of Original Issue on Sep 09, 2005) - Rs 2,000 crore
* 7.72 GS 2055, maturing on October 26, 2055 (Reissue of Original Issue on Oct 26, 2015) - Rs 4,000 crore
* **Auction Details:**
* Conducted by: Reserve Bank of India, Mumbai Office.
* Date: September 28, 2018.
* Bidding Platform: RBI's E-Kuber system.
* Bidding Window:
* Non-competitive bids: 10:30 a.m. to 11:30 a.m.
* Competitive bids: 10:30 a.m. to 12:00 noon.
* **Allotment to Non-Competitive Bidders:**
* Up to 5% of the notified amount is reserved for eligible individuals and institutions via the Scheme for Non-competitive Bidding Facility.
* **When Issued (WI) Trading:**
* The stocks are eligible for WI trading as per RBI guidelines.
* **Payment and Issue Date:**
* Payment Date: October 1, 2018
* **Interest and Repayment:**
* Interest is paid semi-annually from the original issue/last coupon payment date.
* Stocks will be repaid at par on the maturity date.
* Accrued interest is payable on nominal stock value from the date of original issue/last coupon payment date up to the due date, as detailed in the table.
**Impact Analysis:**
* **Bidders (Individuals, Institutions, Banks, Primary Dealers):**
* *Impact:* Opportunity to invest in government securities with varying tenures and yields. Successful bidders must pay for the allotted stock on October 1, 2018, including accrued interest.
* *Action Required:* Submit bids electronically via RBI's E-Kuber system within the specified timeframes on September 28, 2018. Ensure funds are available for payment on October 1, 2018.
* **Reserve Bank of India (RBI):**
* *Impact:* Responsible for conducting the auction, displaying results, and managing the E-Kuber platform for bidding.
* *Action Required:* Conduct the auction on September 28, 2018, and display the results at its Mumbai Office.
* **Government of India:**
* *Impact:* Raises funds through the sale/reissue of government stocks to finance its fiscal deficit.
* *Action Required:* Monitor the auction results and manage the proceeds from the sale.
Key Entities Referenced
Ministry of Finance: The ministry responsible for economic and 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 regulating the country's monetary policy and banking system.
Mumbai, Maharashtra: The location of the Reserve Bank of India office where the auction will be conducted.
Government Stock: Refers to government securities being sold/reissued through auction.
E-Kuber: The Core Banking Solution system of Reserve Bank of India used for submitting bids in electronic format.
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 on March 27, 2018, which contains the 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 Sep 24, 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 Sep 28, 2018.
Bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-
Kuber) system on Sep 28, 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 Sep 28,
2018. The payment by successful bidders will be on Oct 1, 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 Sep 30, 2018 Oct 16 and Apr 16
7.17% GS 2028 7.17 Jul 08, 2018 Sep 30, 2018 Jan 08 and Jul 08
7.40% GS 2035 7.40 Sep 09, 2018 Sep 30, 2018 Mar 09 and Sep 09
7.72% GS 2055 7.72 Apr 26, 2018 Sep 30, 2018 Oct 26 and Apr 26
By Order of the President of India
(Arvind Shrivastava)
Joint Secretary to the Government of India