The Reserve Bank of India has set ₹810 crore minimum underwriting and bidding commitments for each primary dealer ahead of a ₹34,000 crore government bond reissue scheduled for Nov. 13.
In a Nov. 12 notice, the RBI set the minimum underwriting commitment and minimum bid in the Additional Competitive Underwriting auction at ₹810 crore per dealer. The central bank will use a multiple-price method, with electronic bids submitted through its e-Kuber system during a 30-minute window.
The underwriting auction is separate from the government’s sale of the bond, also scheduled for Nov. 13. India’s Finance Ministry has notified ₹34,000 crore for sale and allows the government to retain up to ₹2,000 crore in subscriptions above that amount. The sale schedule was announced earlier.
The RBI’s primary-dealer rules provide a fallback if investor subscriptions do not cover the sale: securities may devolve to dealers. The rules also provide commission on accepted underwriting. The RBI notice says commission payments to each dealer are scheduled for the bond’s issue date, but does not give the rate.
The security carries a 6.94% coupon, payable every six months, and matures May 11, 2036. Successful bidders are due to pay on Nov. 16, the reissue date. The RBI is scheduled to post the sale-auction result on Nov. 13.
