Government of India Announces Auction for Re-Issue of 7.02% GS 2031 and 7.46% GS 2073

On September 9, 2024, the Government of India (GoI) announced the re-issue of two significant government securities: the 7.02% Government Security (GS) 2031 and the 7.46% Government Security (GS) 2073. The auctions for both securities, totaling a notified amount of ₹11,000 crore (nominal) each, will take place on September 13, 2024 (Friday), and will be conducted by the Reserve Bank of India (RBI) through a price-based auction using the multiple price method.

Key Auction Details:

• Securities on Sale:
  1. 7.02% Government Security (GS) 2031
  2. 7.46% Government Security (GS) 2073
• Notified Amount: ₹11,000 crore (nominal) for each security.
• Auction Date: September 13, 2024 (Friday).
• Auction Method: Price-based auction using the multiple price method.

The Government of India also reserves the option to retain an additional subscription of up to ₹2,000 crore for each of the securities mentioned, providing further opportunities for investors.

Non-Competitive Bidding Facility

To ensure wider participation, up to 5% of the notified amount of the securities on sale will be allotted to eligible individuals and institutions under the Non-Competitive Bidding Facility scheme. This facility is designed to encourage participation from retail investors and smaller institutions who may not have the resources or expertise to compete with larger investors in the auction process.

Bidding Timeline and Process:

• Non-Competitive Bids:
  • Submission window: 10:30 a.m. to 11:00 a.m. on September 13, 2024.
• Competitive Bids:
  • Submission window: 10:30 a.m. to 11:30 a.m. on September 13, 2024.
• Platform: All bids must be submitted in electronic format through the RBI’s E-Kuber Core Banking Solution system.

Results and Payment Schedule

The results of the auction will be announced later on September 13, 2024 (Friday). Successful bidders are required to make the necessary payments on September 17, 2024 (Tuesday).

“When Issued” Trading Eligibility

Both securities will be eligible for “When Issued” trading, in line with the RBI’s guidelines for When Issued transactions in Central Government Securities, first introduced in July 2018 and updated periodically. This allows for the trading of securities even before their issuance, adding liquidity and flexibility for market participants.

In Conclusion, The auction of the 7.02% GS 2031 and 7.46% GS 2073 securities presents a valuable opportunity for investors to participate in government-backed securities with attractive interest rates. With both competitive and non-competitive bidding options available, investors of all sizes have a chance to acquire these securities and benefit from the stability and reliability of government bonds.

For more information on bidding procedures and guidelines, investors are encouraged to refer to the RBI’s official circulars and notifications.