Executive Summary:
The Government of India announces the sale/reissue of multiple government stocks via auction to be conducted by the Reserve Bank of India (RBI) on December 07, 2018. This notification details the terms and conditions for the sale, including the dates of maturity, notified amounts, and interest payment schedules for each security. Payment by successful bidders is due on December 10, 2018.
Key Points / Main Content:
Auction Details:
* RBI, Mumbai Office will conduct the auction on December 07, 2018.
* Bids must be submitted electronically through the RBI's e-Kuber system on December 07, 2018.
* Non-competitive bids: 10.30 a.m. and 11.30 a.m.
* Competitive bids: 10.30 a.m. and 12.00 noon.
* Auction results will be displayed by the RBI on December 07, 2018, at its Mumbai Office.
* Payment by successful bidders is due on December 10, 2018.
Government Stock Specifics:
* Reissue of Government Stocks:
* 8.24 GS 2027: Maturity Date: Feb 15, 2027, Notified Amount: Rs 3,000 Crore
* 7.17 GS 2028: Maturity Date: Jan 08, 2028, Notified Amount: Rs 4,000 Crore
* 7.50 GS 2034: Maturity Date: Aug 10, 2034, Notified Amount: Rs 2,000 Crore
* 7.72 GS 2055: Maturity Date: Oct 26, 2055, Notified Amount: Rs 3,000 Crore
* The total notified amount is Rs 12,000 Crore.
* GoI has the option to retain additional subscriptions up to Rs 1,000 Crore against any one or more securities.
* Stocks are subject to the terms and conditions outlined in this notification and the General Notification F.No.42WM2018, dated March 27, 2018.
* Accrued interest is included in the payment for the stocks.
Allotment to Non-Competitive Bidders:
* Up to 5% of the notified amount will be allotted to eligible individuals/institutions via the Scheme for Non-competitive Bidding Facility.
Other Information:
* The Stock will be eligible for When Issued trading.
* Interest will accrue on the nominal value and be paid half-yearly.
* The Stock will be repaid at par on the maturity date.
* Details of coupon payment dates and dates up to which accrued interest is due are provided for each security.
Impact Analysis:
Bidders (Individuals, Institutions, and Banks):
Impact: Need to assess the terms of the auction and the specific government stocks being offered to make informed bidding decisions. Successful bidders are obligated to make payments by December 10, 2018.
Action Required: Submit bids electronically via the RBI's e-Kuber system within the specified timeframes on December 07, 2018, and ensure timely payment if the bid is successful.
Reserve Bank of India (RBI):
Impact: Responsible for conducting the auction, managing the bidding process, and displaying the auction results.
Action Required: Execute the auction on December 07, 2018, announce the results, and facilitate the payment process.
Government of India (GoI):
Impact: The GoI is raising funds through the sale/reissue of these government stocks.
Action Required: Monitor the progress and outcome of the auction.
Investors/Traders:
Impact: Opportunity to invest in government securities with varying maturities and interest rates. Those engaging in "When Issued" trading need to adhere to RBI guidelines.
Action Required: Evaluate investment options based on individual risk profiles and market conditions.
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, responsible for economic policy and programs.
Reserve Bank of India: The central bank of India, responsible for conducting auctions for Government Stocks.
Mumbai, Maharashtra: The city where the Reserve Bank of India office is located and where the auction will be conducted.
8.24 GS 2027: Government Stock with an 8.24% coupon rate maturing in 2027.
7.17 GS 2028: Government Stock with a 7.17% coupon rate maturing in 2028.
7.50 GS 2034: Government Stock with a 7.50% coupon rate maturing in 2034.
7.72 GS 2055: Government Stock with a 7.72% coupon rate maturing in 2055.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated December 03, 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
7.72% GS 2055 Oct. 26, 2015 40-00-00 Oct. 26, 2055 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 December 07,
2018. Bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking
Solution (E-Kuber) system on December 07, 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 December
07, 2018. The payment by successful bidders will be on December 10, 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 December 09, 2018 Feb 15 and Aug 15
7.17% GS 2028 7.17 July 08, 2018 December 09, 2018 Jan 08 and July 08
7.50% GS 2034 7.50 Aug 10, 2018 December 09, 2018 Feb 10 and Aug 10
7.72% GS 2055 7.72 Oct 26, 2018 December 09, 2018 Apr 26 and Oct 26
By Order of the President of India
(Arvind Shrivastava)
Joint Secretary to the Government of India