**Executive Summary**
This document from the Government of Tamil Nadu, dated February 13, 2025, notifies the market borrowing program via auction of two reissued Tamil Nadu State Government Stocks (TNSGS). Auctions will be conducted by the Reserve Bank of India on February 18, 2025. Payment by successful bidders is due on February 20, 2025.
**Key Points / Main Content**
* **Reissue of TNSGS:**
* Reissue of 7.09% TNSGS 2035 issued on February 12, 2025, for Rs. 1000 crore.
* Reissue of 7.18% TNSGS 2055 issued on February 12, 2025, for Rs. 2000 crore.
* **Object of the Loan:**
* Financing part of the capital expenditure of plan schemes and other development schemes under execution.
* Consent obtained from the Central Government for the floatation of this loan as required by Article 293(3) of the Constitution of India.
* **Method of Issue and Auction Details:**
* Stocks to be sold through the Reserve Bank of India, Mumbai Office (PDO), by auction.
* Auction to be conducted as prescribed in paragraph 6.1 of General Notification No.644(L)/W&M-II/2023, dated February 22, 2023.
* Coupon rate to be determined by the Reserve Bank of India at the price-based auction under multiple price formats.
* Bids to be submitted electronically via the Reserve Bank of India Core Banking Solution (E-Kuber) System on February 18, 2025.
* Competitive bids: 10:30 A.M. - 11:30 A.M.
* Non-competitive bids: 10:30 A.M. - 11:00 A.M.
* **Allotment and Payment:**
* Up to 10% of the notified amount of the sale allotted to eligible individuals and institutions, subject to a maximum limit of 1% for a single bid.
* Auction results will be displayed on the Reserve Bank of India website on the same day.
* Payment by successful bidders due on February 20, 2025, before the close of banking hours.
* **Stock Tenure, Repayment, and Interest:**
* 7. 09% TNSGS 2035 tenure: 10 years, commencing February 12, 2025, and repaid on February 12, 2035. Interest rate: 7.09% per annum, paid half-yearly on August 12 and February 12.
* 8. 18% TNSGS 2055 tenure: 30 years, commencing February 12, 2025, and repaid on February 12, 2055. Interest rate: 7.18% per annum, paid half-yearly on August 12 and February 12.
* **Eligibility:**
* Investment in Government Stock is considered an eligible investment in Government Securities for the purpose of Statutory Liquidity Ratio (SLR) under Section 24 of the Banking Regulation Act, 1949.
**Impact Analysis**
**Banks and Financial Institutions**
*Impact:*
The investment in Government Stock qualifies as an eligible investment in Government Securities for the purpose of Statutory Liquidity Ratio (SLR), providing potential investment avenues.
*Action Required:*
Consider participating in the auction to meet SLR requirements and assess investment opportunities.
**Eligible Individuals and Institutions**
*Impact:*
Eligible individuals and institutions have the opportunity to invest in the TNSGS, with a portion of the sale amount reserved for them.
*Action Required:*
Submit bids through the Reserve Bank of India Core Banking Solution (E-Kuber) System within the specified timeframe, subject to the prescribed limits.
**Reserve Bank of India (RBI)**
*Impact:*
Responsible for conducting the auction and managing the sale of the Government Stock.
*Action Required:*
Conduct the auction on February 18, 2025, determine the coupon rate, display the auction results on the website, and oversee the payment process.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for conducting the auction and managing the government stock sales.
Finance Department: Department of the Tamil Nadu government issuing the notifications regarding market borrowing program.
7.09% TNSGS 2035: Tamil Nadu State Government Stock to be reissued by auction.
7.18% TNSGS 2055: Tamil Nadu State Government Stock to be reissued by auction.
Banking Regulation Act, 1949: Indian law under which government stock is considered an eligible investment for banks.