The Reserve Bank of India (RBI) will auction state securities with a combined face value of ₹23,300 crore on Oct. 27, offering debt from 13 state governments through a mix of new issues and previously issued bonds.
Tamil Nadu has the largest notified amount at ₹9,000 crore. Uttar Pradesh is offering ₹3,500 crore and Bihar ₹3,000 crore, according to the RBI schedule.
New securities make up ₹3,800 crore of the sale, while reissues total ₹19,500 crore. Assam, Bihar and Nagaland each have a new nine-year issue, worth ₹1,000 crore, ₹1,000 crore and ₹300 crore, respectively. Keralam is offering a new 14-year security worth ₹1,500 crore.
Bids for new securities will be submitted by yield, while bids for reissues will be based on price. The RBI will choose the highest yield it accepts for new issues and the lowest accepted price for reissues. Rates on new securities will be set at the auction; reissues will keep the rates established when they were first issued.
The notice allows up to 10% of each stock’s notified amount to be allotted under the noncompetitive bidding scheme, with a single bid capped at 1%. Individual investors can participate through RBI Retail Direct. Interest on new securities is scheduled twice a year, on April 28 and Oct. 28. Banks may count the securities toward their Statutory Liquidity Ratio requirements, and the stocks qualify for the ready forward facility.
The RBI plans to announce results on Oct. 27. Successful bidders must pay by Oct. 28 during banking hours. At the previous state securities auction on Oct. 19, the RBI accepted ₹23,016.418 crore against a ₹24,400 crore offer, EconoTimes reported.
