The central government has proposed to raise ₹32,000 crore through the sale of bonds on August 12, 2022. The fund will be raised by issuing four dated government securities, which will be used to finance the public debt and ongoing projects. The dated government securities are long-term investment instruments issued by the government, which carry a fixed or floating coupon (or interest rate) associated with them that are paid on the face value at fixed intervals. These securities, usually issued in the form of treasury notes, bills, and bonds, are less risky and assure full repayment of the principal investment amount upon maturity.

The government of India will issue four dated securities for a notified amount of ₹32,000 with an option to retain additional subscription up to ₹2,000 crore against each security, the ministry of financial said in a statement. The auctions will be conducted by the Reserve Bank of India (RBI’s) Mumbai Office on August 12, subject to certain conditions.

“The Government of India (GoI) has announced the Sale (re-issue) of (i) “7.38% Government Security, 2027” for a notified amount of ₹9,000 crore (nominal) through price based auction using uniform price method; (ii) ‘‘GoI Floating Rate Bonds, 2028” for a notified amount of ₹4,000 crore (nominal) through price based auction using uniform price method; (iii) “7.54% Government Security 2036” for a notified amount of ₹11,000 crore (nominal) through price based auction using uniform price method and (iv) “6.99% Government Security 2051” for a notified amount of ₹8,000 crore (nominal) through price based auction using multiple price method,” the FinMin said in a release on August 8.

The auction will be conducted using a uniform price method for 7.38% GS 2027, GOI FRB 2028, 7.54% GS 2036 and multiple price method for 6.99% GS 2051. For uniform price-based auction, bids will get accepted at the cut off yield/price accepted in the auction. In case of multiple price-based auction, successful bids will get accepted at the respective quoted yield/price for the security.

As per the release, up to 5% of the notified amount of the sale of the securities will be allotted to eligible individuals and institutions as per the scheme for non-competitive bidding facility in the auction of government securities.

“Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on August 12, 2022. The non-competitive bids should be submitted between 10.30 a.m. and 11.00 a.m. and the competitive bids should be submitted between 10.30 a.m. and 11.30 a.m,” the release noted.

“Bids for underwriting of the additional competitive underwriting (ACU) portion can be submitted by ‘Primary Dealers’ from 09.00 a.m. up to 09.30 a.m. on August 12 on the Reserve Bank of India Core Banking Solution (E-Kuber) system,” it added.

The result of the auctions will be announced on August 12, and payment by successful bidders will be done on August 17, 2022.

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