**Executive Summary**
The Tamil Nadu Government Gazette, dated January 24, 2025, announces the sale of Tamil Nadu Government Stock (Securities) via auction to finance capital expenditure. The auction will be conducted by the Reserve Bank of India (RBI) on January 28, 2025, with payments due on January 29, 2025. The document also announces the reissue of 7.12% TNSGS 2055.
**Key Points / Main Content**
* **Government Stock Auction (20-year tenure)**
* The Government of Tamil Nadu is selling Tamil Nadu Government Stock (Securities) with a 20-year tenure for an aggregate amount of Rs.2000 crore.
* The object of the loan is to finance part of Capital expenditure of Plan Schemes and other Development Schemes under execution.
* The sale is subject to the terms and conditions in the specific notification and the General Notification No.644(L)/W&M-II/2023, dated February 22, 2023.
* The stock will be sold through the Reserve Bank of India, Mumbai Office (PDO), by auction with the coupon rate determined by the RBI.
* Up to 10% of the notified amount is allotted to eligible non-competitive bidders, with a maximum limit of 1% of the notified amount for a single bid.
* The auction will be conducted on January 28, 2025, with competitive bids submitted electronically between 10:30 A.M. and 11:30 A.M., and non-competitive bids between 10:30 A.M. and 11:00 A.M.
* Successful bidders must make payments by January 29, 2025.
* The loan will be repaid on January 29, 2045.
* Interest is paid on July 29 and January 29.
* **Reissue of 7.12% TNSGS 2055 (30-year tenure)**
* Government of Tamil Nadu is reissuing 7.12% TNSGS 2055 issued on January 22, 2025 for an aggregate amount of Rs.2000 crore.
* The sale is subject to the terms and conditions in the specific notification and the General Notification No.644(L)/W&M-II/2023, dated February 22, 2023.
* The object of the loan is to finance part of Capital expenditure of Plan Schemes and other Development Schemes under execution.
* The stock will be sold through the Reserve Bank of India, Mumbai Office (PDO), by auction with the coupon rate determined by the RBI.
* Up to 10% of the notified amount is allotted to eligible non-competitive bidders, with a maximum limit of 1% of the notified amount for a single bid.
* The auction will be conducted on January 28, 2025, with competitive bids submitted electronically between 10:30 A.M. and 11:30 A.M., and non-competitive bids between 10:30 A.M. and 11:00 A.M.
* Successful bidders must make payments by January 29, 2025.
* The loan will be repaid on January 22, 2055.
* Interest at the rate of 7.12% per annum will accrue on the nominal value of the stock from the date of original issue date and will be paid half yearly on July 22 and January 22.
* **Eligibility of Securities**
* Investment in Government Stock is an eligible investment for banks under Section 24 of the Banking Regulation Act, 1949, for Statutory Liquidity Ratio (SLR).
* The stocks will qualify for the ready forward facility.
**Impact Analysis**
**Stakeholder: Reserve Bank of India (RBI)**
* **Impact:** The RBI is responsible for conducting the auction and determining the coupon rate.
* **Action Required:** Conduct the auction of Government Stock on January 28, 2025, and display the auction results on its website.
**Stakeholder: Banks and Financial Institutions**
* **Impact:** Banks can invest in the Government Stock and count it towards their Statutory Liquidity Ratio (SLR).
* **Action Required:** Decide whether to participate in the auction on January 28, 2025, and submit bids electronically if participating.
**Stakeholder: Eligible Individuals and Institutions (Non-Competitive Bidders)**
* **Impact:** They have an opportunity to acquire Government Stock up to 10% of the notified amount.
* **Action Required:** Submit bids electronically before 11:00 A.M. on January 28, 2025, if participating in the non-competitive bidding.
**Stakeholder: Government of Tamil Nadu**
* **Impact:** The government will raise funds for capital expenditure on Plan Schemes and other Development Schemes.
* **Action Required:** Monitor the auction and ensure the successful sale of the Government Stock.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for conducting the auction and managing the government stock sale.
Tamil Nadu Government Stock: Securities issued by the Tamil Nadu government for market borrowing through auction.
General Notification No.644(L)/W&M-II/2023: A referenced document containing general terms and conditions for the sale of Tamil Nadu Government Stock.
Banking Regulation Act, 1949: Indian law under which investment in Government Stock is reckoned as an eligible investment in Government Securities by banks for the purpose of Statutory Liquidity Ratio (SLR).
Chennai: Location where successful bidders can make payments to Reserve Bank of India.