The Reserve Bank of India (RBI) has set an Oct. 19 auction for securities offered by 11 state and union territory issuers, with a combined face value of ₹24,400 crore and payment due two days later. The amount is the face value notified for sale, not the value of securities ultimately accepted.
The issuers include 10 states and Jammu and Kashmir. Maharashtra has the largest notified amount at ₹8,000 crore, followed by Madhya Pradesh at ₹4,500 crore and Rajasthan at ₹3,500 crore. Gujarat and Telangana each listed ₹2,000 crore, Punjab ₹1,500 crore and Andhra Pradesh ₹1,000 crore. Jammu and Kashmir and Tripura each offered ₹800 crore. Goa’s amount is ₹200 crore and Meghalaya’s is ₹100 crore.
The sale pairs new government securities offered through yield-based auctions with reissues auctioned on price. New issues carry tenors of four, eight, 10, 12, 15, 16 and 24 years. The reissued securities have coupons ranging from 7.53% to 8.08% and maturity years from 2034 to 2057. The RBI will set the maximum yield or minimum price at which it accepts bids.
Bids must be submitted electronically through the RBI’s E-Kuber system on Oct. 19. Under the noncompetitive facility, eligible bidders may be allotted up to 10% of a security’s notified amount, with each bid limited to 1%. Individual investors may also bid through RBI Retail Direct. The minimum nominal issue is ₹10,000, with additional amounts in multiples of ₹10,000.
Interest on new stocks will be paid twice a year, on April 21 and Oct. 21. Reissued securities will continue to pay the rate set when they were first issued, also on a half-yearly schedule. The securities qualify as investments toward banks’ Statutory Liquidity Ratio requirement and for the RBI’s ready-forward facility.
The RBI plans to announce the auction results on Oct. 19. Successful bidders must pay during banking hours on Oct. 21 at Mumbai or RBI regional offices.
