RBI To Auction Rs 28,000 Crore Government Securities On May 29

The Reserve Bank of India (RBI) has announced the auction of Government of India dated securities worth Rs 28,000 crore. The auction will take place on May 29 through RBI’s Mumbai office.

According to the RBI notification, the government will re-issue two securities under the auction. These include the 6.68 per cent Government Security (G-Secs) 2040 with a notified amount of Rs 17,000 crore and the 7.43 per cent GS 2076 with a notified amount of Rs 11,000 crore. The government has also retained the option to accept an additional subscription of up to Rs 2,000 crore against each of the two securities.

Auction To Be Conducted Through E-Kuber

The securities will be sold through a multiple price auction method, under which successful bidders will receive securities at the yields or prices quoted by them. RBI has said the auction will be conducted through its Core Banking Solution, also known as the e-Kuber system.

Both competitive and non-competitive bids will have to be submitted electronically on May 29. Non-competitive bids will be accepted between 10:30 am and 11:00 am, while competitive bids will be accepted between 10:30 am and 11:30 am. The results will be announced on the same day, while settlement will take place on June 1.

RBI has also said primary dealers can submit bids for the Additional Competitive Underwriting portion between 9:00 am and 9:30 am on the auction day. In addition, the securities will be eligible for “When Issued” trading from May 26 to May 29, allowing investors to trade them before their official issuance.

Retail Investors Can Participate

The central bank has said up to 5 per cent of the notified amount of each security will be reserved for eligible individuals and institutions under the non-competitive bidding scheme. Retail investors can also place bids through the RBI Retail Direct platform.

The minimum investment amount has been fixed at Rs 10,000 and in multiples of Rs 10,000 thereafter. RBI has added that interest on government securities is generally paid half-yearly, except in cases involving securities with non-standard maturities.

The notification has also stated that investors can submit multiple competitive bids in electronic format, although the total amount of bids submitted by a single investor cannot exceed the notified auction amount. The RBI has retained the authority to accept or reject bids, either fully or partially, without assigning any reason.