Government Bonds Worth Rs 34,000 Crore Set for Auction This Friday

Synopsis

The Finance Ministry has announced the auction of government bonds valued at Rs 34,000 crore, taking place on February 21 in Mumbai. The bonds will be sold in three segments through the Reserve Bank of India, allowing both competitive and non-competitive bids.

Key Takeaways

Upcoming auction of Rs 34,000 crore in government bonds.
Bids accepted on February 21 via E-Kuber.
Three lots featuring different securities.
5% allocated for non-competitive bidders.
Results announced on February 21, payments due February 24.

New Delhi, Feb 17 (NationPress) On Monday, the Finance Ministry revealed the upcoming sale of government bonds valued at Rs 34,000 crore, which will be auctioned in three segments by the Reserve Bank of India in Mumbai on February 21.

The initial segment features 6.75 percent Government Security 2029 with a notified amount of Rs 14,000 crore, while the second segment includes 6.98 percent GOI SGrB 2054 amounting to Rs 5,000 crore. The final segment consists of 7.34 percent Government Security 2064 for a notified amount of Rs 15,000 crore. All three segments will be auctioned using a price-based method with a multiple price approach, as per the official announcement.

The government holds the right to accept additional subscriptions up to Rs 2,000 crore for each of the securities listed above.

According to the Scheme for Non-Competitive Bidding Facility in the auction of Government Securities, up to 5 percent of the total sale amount will be allocated to qualified individuals and institutions.

Bids for both competitive and non-competitive categories must be submitted electronically via the Reserve Bank of India Core Banking Solution (E-Kuber) system on February 21. Non-competitive bids should be filed between 10:30 a.m. and 11:00 a.m., while competitive bids will be accepted from 10:30 a.m. to 11:30 a.m., as stated by the authorities.

The auction results will be disclosed on February 21, and payment from successful bidders is due on February 24 (Monday).

The securities will qualify for When Issued trading in line with the guidelines on 'When Issued transactions in Central Government Securities' published by the Reserve Bank of India through circular No. RBI/2018-19/25 dated July 24, 2018, and its subsequent amendments.

Government bonds are debt instruments issued by governments to raise funds for public expenditure. They are viewed as low-risk investments due to government backing, hence they typically offer lower interest rates.