RBI To Auction Rs 39,000 Cr In G-Sec On 29 September

The government of India has announced plans to raise funds through the sale (re-issue) of Government Securities via auctions scheduled for September 29, 2023. This initiative is a move aimed at mobilising financial resources. 

The securities offered in this auction comprise four categories, each with its designated amount. These include the 6.99 per cent GS 2026 valued at  Rs 8,000 crore, the 7.17 per cent GS 2030 at Rs 7,000 crore, the 7.18 per cent GS 2037 at Rs 12,000 crore and the 7.25 per cent GS 2063 at  Rs12,000 crore.

Under the established underwriting scheme introduced on 14 November 2007, Primary Dealers (PDs) are mandated to commit to a Minimum Underwriting Commitment (MUC) amount and a minimum bidding commitment under Additional Competitive Underwriting (ACU) for the underwriting auction. 

For this upcoming auction, the allocations per PD are as follows: Rs 191 crore for both the MUC amount and minimum bidding commitment under ACU auction for the 6.99 per cent GS 2026, Rs 167 crore for the 7.17 per cent GS 2030 and Rs 286 crore for both the MUC amount and minimum bidding commitment under ACU auction for both the 7.18 per cent GS 2037 and the 7.25 per cent GS 2063.

The underwriting auction will be conducted employing a multiple price-based method on 29 September 2023. PDs have the opportunity to electronically submit their bids for the ACU auction through the Core Banking Solution (E-Kuber) System between 09.00 A.M. and 09.30 A.M. on the day of the underwriting auction. Promptly upon the issuance of the securities, the underwriting commission will be credited to the current account of the respective PDs with the Reserve Bank of India (RBI) on the same day.

This strategic step taken by the Government of India is expected to provide financial resources through the auction of Government Securities, thereby contributing to the nation's fiscal stability and growth.