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 May 10, 2019. Bids must be submitted electronically through the RBI's E-Kuber system on the auction date. Payment by successful bidders is due on May 13, 2019.
Key Points / Main Content:
* **Auction Details:**
* The auction is for the sale/reissue of four Government Stocks with varying maturity dates (2024, 2029, 2043, and 2049).
* The total notified amount for the sale is Rs 17,000 crore.
* GoI has the option to retain additional subscription up to 1000 Cr each against any one or more of the above securities.
* The auction will be conducted by the Reserve Bank of India, Mumbai.
* The method of auction is price multiple.
* **Bidding Process:**
* Bids must be submitted electronically via the RBI's E-Kuber system on May 10, 2019.
* Non-competitive bids: 11:30 a.m. - 12:00 noon.
* Competitive bids: 11:30 a.m. - 12:30 p.m.
* Up to 5% of the notified amount will be allotted to eligible individuals and institutions as per the Scheme for Non-competitive Bidding Facility.
* **Financial Aspects:**
* Payment by successful bidders is due on May 13, 2019.
* Payment includes accrued interest from the date of original issue/last coupon payment date.
* Interest will be paid half-yearly, and the stock will be repaid at par on the maturity date.
* **Other Information:**
* The stocks are eligible for "When Issued" trading as per RBI guidelines.
* Auction results will be displayed at the RBI's Mumbai office on May 10, 2019.
Impact Analysis:
* **Bidders (Individuals and Institutions):**
* Impact: Opportunity to invest in Government Stocks with varying tenures and interest rates.
* Action Required: Submit bids electronically via the RBI's E-Kuber system within the specified timeframe on May 10, 2019, and ensure payment by May 13, 2019, if the bid is successful.
* **Reserve Bank of India (RBI):**
* Impact: Responsible for conducting the auction, processing bids, and announcing results.
* Action Required: Conduct the auction on May 10, 2019, display results, and manage the payment process.
* **Government of India (GoI):**
* Impact: Raises funds through the sale/reissue of Government Stocks.
* Action Required: Monitor the auction process and manage the funds raised.
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 related matters.
Reserve Bank of India: The central bank of India, responsible for conducting auctions of government stocks.
Mumbai Office, Fort, Maharashtra: The specific branch of the Reserve Bank of India located in Mumbai, responsible for conducting the auction.
Government Stock: Refers to government securities being reissued and sold through auction.
E-Kuber: The Core Banking Solution system of Reserve Bank of India used for submitting bids.
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 that outlines the general terms and conditions for government stock sales.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated May 6, 2019
NOTIFICATION
Auction for Sale (re-issue) of Government Stock (GS)
F.No.4(6)W&M/2019: Government of India(GoI) hereby notifies sale (re-issue) of the following Government Stocks:
Name of the Security Date of Tenure Date of Base Method Notified Amount
Original Issue (yy-mm-dd) Maturity (in Rs Crore)
7.32% GS 2024 Jan 28, 2019 05-00-00 Jan 28, 2024 Price Multiple 5,000
7.26% GS 2029 Jan 14, 2019 10-00-00 Jan 14, 2029 Price Multiple 6,000
7.69% GS 2043 Apr 30, 2019 24-01-17 Jun 17, 2043 Price Multiple 2,000
7.72% GS 2049 Apr 15, 2019 30-02-00 Jun 15, 2049 Price Multiple 4,000
Subject to the limit of `17000 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 May 10, 2019.
Bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-
Kuber) system on May 10, 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 May 10,
2019. The payment by successful bidders will be on May 13, 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.
Name of the Coupon rate Date of Last Coupon Date upto which Date of Coupon
Security (%) payment accrued interest is due payments
(month / date)
7.32% GS 2024 7.32 New Stock May 12, 2019 Jul 28 and Jan 28
7.26% GS 2029 7.26 New Stock May 12, 2019 Jul 14 and Jan 14
7.69% GS 2043 7.69 New Stock May 12, 2019 Jun 17 and Dec 17
7.72% GS 2049 7.72 New Stock May 12, 2019 Jun 15 and Dec 15
By Order of the President of India
(Arvind Shrivastava)
Joint Secretary to the Government of India