Government to offer Rs 38,000 cr worth of bonds through RBI’s multiple price auction technique
The Finance Ministry announced the sale of Rs 38,000 crore worth of government bonds through the RBI’s new multiple price auction method. The auctions for different securities will be conducted on April 5, with an option to retain additional subscriptions up to Rs 2,000 crore. The results will be announced on the same day, with payment by successful bidders on April 8.
The government will sell “7.33 per cent Government Security 2026” for Rs 6,000 crore, “New Government Security 2034” for Rs 20,000 crore, and “7.25 per cent Government Security 2063” for Rs 12,000 crore. Both competitive and non-competitive bids for the auction should be submitted on RBI’s Core Banking Solution (E-Kuber) system on April 5. The non-competitive bids should be submitted between 12:30 p.m. and 1 p.m., while the competitive bids should be submitted between 12:30 p.m. and 1:30 p.m.
The securities will be eligible for ‘When Issued’ trading as per RBI guidelines. The RBI has decided that all securities under the government’s market borrowing program will be auctioned using the multiple price method. This move aims to streamline the process and better reflect market conditions in the bond auctions.
Overall, the government’s bond sale is significant in size, totaling Rs 38,000 crore. The auctions will provide an opportunity for investors and institutions to participate in the government securities market. The use of the multiple price method in the auctions is aimed at enhancing transparency and efficiency in the bond market.
