Executive Summary:
The Government of India announces the sale/reissue of various Government Stocks via auction. The auction, conducted by the Reserve Bank of India (RBI) in Mumbai, will take place on November 17, 2017, with payment due on November 20, 2017. The total notified amount is ₹15,000 crore, with an option to retain an additional subscription of up to ₹1000 crore.
Key Points / Main Content:
Auction Details:
* RBI Mumbai will conduct the auction on November 17, 2017.
* Bids must be submitted electronically via the RBI's e-Kuber system on November 17, 2017.
* Non-competitive bids: 10:30 a.m. - 11:30 a.m.
* Competitive bids: 10:30 a.m. - 12:00 noon.
* Auction results will be displayed by RBI, Mumbai on November 17, 2017.
* Payment by successful bidders is due on November 20, 2017.
Government Stock Specifics:
* The sale includes the reissue of GoI FRB 2024, 6.79 GS 2027, 7.73 GS 2034 and 7.72 GS 2055.
* Government has the option to retain additional subscription up to ₹1000 crore against any of the above security.
* Stocks are subject to the terms and conditions outlined in the notification and the general notification F.No.413WM2008, dated October 8, 2008.
Allotment to Non-Competitive Bidders:
* Up to 5% of the notified amount is reserved for eligible individuals and institutions via non-competitive bidding, as per the enclosed scheme.
Interest and Repayment:
* Interest accrues on the nominal value from the original issue date or last coupon payment date.
* Interest is paid half-yearly.
* Stocks will be repaid at par on the maturity date.
When Issued Trading:
* The stocks are eligible for When Issued trading, per RBI guidelines.
Impact Analysis:
Successful Bidders
Impact: Required to make payments for the allotted stock by November 20, 2017 and will receive interest payments on a half-yearly basis and principal repayment on the maturity date.
Action Required: Ensure funds are available for payment by the specified date.
Eligible Individuals and Institutions (Non-Competitive Bidders)
Impact: Have the opportunity to be allotted up to 5% of the notified amount of the sale.
Action Required: Submit non-competitive bids between 10:30 a.m. and 11:30 a.m. on November 17, 2017.
Reserve Bank of India (RBI)
Impact: Responsible for conducting the auction, displaying results, and receiving payments.
Action Required: Conduct the auction as per the specified schedule and guidelines.
Government of India
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, Government of India.
Reserve Bank of India: The central bank of India, responsible for conducting auctions of government stocks.
Government Stock: Securities issued by the Government of India to raise funds.
GoI FRB 2024: Government of India Floating Rate Bond maturing in 2024.
6.79 GS 2027: Government Stock with a coupon rate of 6.79% maturing in 2027.
7.73 GS 2034: Government Stock with a coupon rate of 7.73% maturing in 2034.
7.72 GS 2055: Government Stock with a coupon rate of 7.72% maturing in 2055.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated November 13, 2017
NOTIFICATION
Auction for Sale (Re-issue) of Government Stock (GS)
F.No.4(7)W&M/2017: Government of India 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 ` Crore)
GoI FRB 2024 Nov 07, 2016 08-00-00 Nov 07, 2024 Price Multiple 3000
6.79% GS 2027 May 15, 2017 10-00-00 May 15, 2027 Price Multiple 8000
7.73% GS 2034 Oct. 12, 2015 19-02-07 Dec. 19, 2034 Price Multiple 2000
7.72% GS 2055 Oct 26,2015 40-00-00 Oct 26, 2055 Price Multiple 2000
Subject to the limit of ` 15,000 Cr, being total notified amount, GoI will have the option to retain additional subscription
up to ` 1000 Cr against any of the above security. 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(13)–W&M/2008, dated
October 8, 2008 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 17,
2017. Bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking
Solution (E-Kuber) system on November 17, 2017. 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 November
17, 2017. The payment by successful bidders will be on November 20, 2017 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 / 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 Original Issue / Date upto which Date of Coupon
Security (%) Last Coupon payment accrued interest is due payments
(month / date)
GoI FRB 2024* Variable* Nov 07, 2017 November 19, 2017 May 07 and Nov 07
6.79% GS 2027 6.79 Nov 15, 2017 November 19, 2017 May 15 and Nov 15
7.73% GS 2034 7.73 June 19, 2017 November 19, 2017 Dec 19 and June 19
7.72% GS 2055 7.72 Oct 26, 2017 November 19, 2017 Apr 26 and Oct 26
*(i) The interest at a variable rate will be paid every half-yearly.
(ii) The variable coupon rate for payment of interest on subsequent semi-annual period shall be the average rate
rounded off up to two decimal places, of the implicit yields at the cut-off prices of the last three auctions of
Government of India 182 day Treasury Bills, held up to the commencement of the respective semi-annual
coupon period. The implicit yields will be computed by reckoning 365 days in a year.
(iii) In the event of Government of India 182-day Treasury Bill auctions being discontinued during the currency of the
Bonds, the coupon rate will be the average of Yield to Maturity (YTM) rates prevailing for six month Government of
India Security/ies as on the last three non-reporting Fridays prior to the commencement of the semi-annual coupon
period. In case particular Friday/s is/are holiday/s, the yield to maturity rates as on the previous working day shall be
taken.
(iv) The rate of interest payable half yearly on the Bonds during the subsequent years shall be announced by the
Reserve Bank of India before the commencement of the relative semi-annual coupon period.
By Order of the President of India
(Prashant Goyal)
Joint Secretary to the Government of India