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) in Mumbai on May 25, 2018. Bids must be submitted electronically through the RBI's e-Kuber system on the same day. Payment by successful bidders is due on May 28, 2018.
Key Points / Main Content:
Auction Details:
* The auction will be conducted by the Reserve Bank of India, Mumbai Office, on May 25, 2018.
* Bids must be submitted electronically via the RBI's e-Kuber system on May 25, 2018; non-competitive bids between 10:30 a.m. and 11:30 a.m., and competitive bids between 10:30 a.m. and 12:00 noon.
* The government retains the option to retain additional subscriptions up to Rs 1000 Cr against any one or more securities, subject to a total limit of Rs 12000 Cr.
* Up to 5% of the notified amount will be allotted to eligible individuals/institutions via the Scheme for Non-competitive Bidding Facility.
Securities for Sale/Reissue:
* 6.84 GS 2022 maturing on Dec 19, 2022, for Rs 3,000 crore.
* 7.17 GS 2028 maturing on Jan 08, 2028, for Rs 4,000 crore.
* 7.40 GS 2035 maturing on Sep 09, 2035, for Rs 2,000 crore.
* 7.06 GS 2046 maturing on Oct 10, 2046, for Rs 3,000 crore.
Payment and Interest:
* Payment by successful bidders is due on May 28, 2018.
* Payment includes accrued interest from the original issue/last coupon payment date.
* Interest will accrue on the nominal value and be paid semi-annually; stocks will be repaid at par on maturity.
* The specific coupon rates, last coupon payment dates, dates up to which accrued interest is due, and coupon payment dates are detailed for each security.
Other Information:
* The stocks are eligible for When Issued trading.
* The auction results will be displayed by the RBI on May 25, 2018.
* The sale is subject to terms in this notification (Specific Notification) and General Notification F.No.42WM2018, dated March 27, 2018.
Impact Analysis:
Bidders (Individuals and Institutions):
* Impact: Opportunity to purchase/reinvest in government securities; successful bidders must make payment by May 28, 2018.
* Action Required: Submit bids electronically via the RBI's e-Kuber system on May 25, 2018, between the specified times.
Reserve Bank of India (RBI):
* Impact: Responsible for conducting the auction, displaying results, and managing the bidding process.
* Action Required: Conduct the auction on May 25, 2018, display results on the same day, and process payments.
Government of India:
* Impact: Raises funds through the sale/reissue of government securities.
* Action Required: Monitor the auction process and manage funds raised.
Key Entities Referenced
Ministry of Finance: The ministry responsible for economic policy and financial regulation of the Government of India.
Department of Economic Affairs: A department within the Ministry of Finance responsible for economic management and policy formulation.
Reserve Bank of India: The central bank of India, responsible for regulating the banking system and managing the country's currency.
Mumbai Office, Fort, Mumbai: Branch office of Reserve Bank of India located in Mumbai, Maharashtra
Government Stock: Securities issued by the Government of India to raise funds from the market.
6.84 GS 2022: Government Stock with a coupon rate of 6.84% maturing in 2022.
7.17 GS 2028: Government Stock with a coupon rate of 7.17% maturing in 2028.
7.40 GS 2035: Government Stock with a coupon rate of 7.40% maturing in 2035.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated May 21, 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:
Name of the Security Date of Tenure Date of Base Method Notified Amount
Original Issue (yy-mm-dd) Maturity (in Rs Crore)
6.84% GS 2022 Sep 12, 2016 06-03-07 Dec 19, 2022 Price Multiple 3,000
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
7.06% GS 2046 Oct 10, 2016 30-00-00 Oct 10, 2046 Price Multiple 3,000
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 May 25, 2018.
Bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-
Kuber) system on May 25, 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 May 25,
2018. The payment by successful bidders will be on May 28, 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)
6.84% GS 2022 6.84 Dec 19, 2017 May 27, 2018 Jun 19 and Dec 19
7.17% GS 2028 7.17 New Stock May 27, 2018 Jul 08 and Jan 08
7.40% GS 2035 7.40 Mar 09, 2018 May 27, 2018 Sep 09 and Mar 09
7.06% GS 2046 7.06 Apr 10, 2018 May 27, 2018 Oct 10 and Apr 10
By Order of the President of India
(Arvind Shrivastava)
Joint Secretary to the Government of India