Executive Summary:
This notification from the Government of India announces the sale/reissue of multiple Government Stocks via auction on April 20, 2018, through the Reserve Bank of India (RBI). The total notified amount is ₹12000 crore, with an option to retain additional subscriptions up to ₹1000 crore against any one or more securities. Payment by successful bidders is due on April 23, 2018.
Key Points / Main Content:
Auction Details:
* Auction Date: April 20, 2018, conducted by RBI Mumbai.
* Bidding: Electronic format via RBI's E-Kuber system.
* Non-competitive bids: 10:30 a.m. to 11:30 a.m.
* Competitive bids: 10:30 a.m. to 12:00 noon.
Securities for Sale/Reissue:
* 6.65 GS 2020, maturing April 09, 2020: ₹2000 crore
* GoI FRB 2024, maturing November 07, 2024: ₹3000 crore
* 7.17 GS 2028, maturing January 08, 2028: ₹3000 crore
* 6.57 GS 2033, maturing December 05, 2033: ₹1000 crore
* 7.72 GS 2055, maturing October 26, 2055: ₹3000 crore
Allotment and Payment:
* Up to 5% of the notified amount will be allotted to eligible non-competitive bidders.
* Payment Date: April 23, 2018, including accrued interest from the original issue date/last coupon payment date.
Interest and Repayment:
* Interest paid half-yearly.
* Stocks repaid at par on maturity date.
* Specific coupon rates and payment dates are detailed for each security.
* Variable interest rate details are provided for GoI FRB 2024.
Other Information:
* The stocks are eligible for "When Issued" trading.
* Auction results will be displayed by the RBI on April 20, 2018.
Impact Analysis:
Bidders (Individuals, Institutions, and Non-Competitive Bidders):
* Impact: Opportunity to invest in Government Stocks with varying maturities and interest rates.
* Action Required: Submit bids electronically via RBI's E-Kuber system within the specified timeframes on April 20, 2018, and ensure payment by April 23, 2018, if successful.
Reserve Bank of India (RBI):
* Impact: Responsible for conducting the auction, displaying results, and facilitating payment.
* Action Required: Conduct the auction on April 20, 2018, display the results, and manage the payment process on April 23, 2018.
Government of India (GoI):
* Impact: Manages its borrowing program through the sale/reissue of Government Stocks.
* Action Required: Monitor the auction and exercise the option to retain additional subscriptions if deemed necessary.
Key Entities Referenced
Ministry of Finance: The ministry responsible for the financial matters of the Government of India.
Department of Economic Affairs: A department within the Ministry of Finance responsible for economic policy and development.
Reserve Bank of India: The central bank of India, responsible for regulating the banking system and issuing currency.
Mumbai, Maharashtra: The city where the Reserve Bank of India's office involved in the auction is located.
Government Stock: Securities issued by the Government of India to raise funds from the market.
GoI FRB 2024: Government of India Floating Rate Bond maturing in 2024.
6.65 GS 2020: Government Stock with a coupon rate of 6.65% maturing in 2020.
Prashant Goyal: Joint Secretary to the Government of India, signing the notification.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated April 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 ` Crore)
6.65% GS 2020 Apr 09, 2018 02-00-00 Apr 09, 2020 Price Multiple 2000
GoI FRB 2024 Nov 07, 2016 08-00-00 Nov 07, 2024 Price Multiple 3000
7.17% GS 2028 Jan. 08, 2018 10-00-00 Jan. 08, 2028 Price Multiple 3000
6.57% GS 2033 Dec 05, 2016 17-00-00 Dec. 05, 2033 Price Multiple 1000
7.72% GS 2055 Oct. 26, 2015 40-00-00 Oct. 26, 2055 Price Multiple 3000
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 April 20, 2018.
Bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-
Kuber) system on April 20, 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 April 20,
2018. The payment by successful bidders will be on April 23, 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.
Name of the Coupon rate Date of Last Coupon Date upto which Date of Coupon
Security (%) payment accrued interest is due payments (month /
date)
6.65% GS 2020 6.65 New Stock Apr 09 - Apr 22, 2018 Oct 09 and Apr 09
GoI FRB 2024 Variable* Nov 07, 2017 Apr 22, 2018 May 07 and Nov 07
7.17% GS 2028 7.17 New Stock Apr 22, 2018 July 08 and Jan 08
6.57% GS 2033 6.57 Dec 05, 2017 Apr 22, 2018 Jun 05 and Dec 05
7.72% GS 2055 7.72 Oct 26, 2017 Apr 22, 2018 Apr 26 and Oct 26
* GoI FRB 2024*
(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