RBI announces underwriting auction results for Rs 28,000 crore G-Secs auction
Mumbai, July 24
The Reserve Bank of India on Friday announced the results of the underwriting auction conducted for Rs 28,000 crore worth of government securities. The auction was fully subscribed, and there was no devolvement to primary dealers.
According to the central bank, the auction was held on July 24, 2026, for additional competitive underwriting (ACU) of the New GS 2041 and the 7.43 per cent Government Security (GS) 2076. The ACU process allows primary dealers to competitively bid for the right to underwrite additional portions of the notified amount of government bonds, over and above their minimum underwriting commitments.
For the New GS 2041, the notified amount was Rs 17,000 crore. The minimum underwriting commitment (MUC) stood at Rs 8,505 crore, with the remaining Rs 8,495 crore accepted under ACU. The total amount underwritten was thus Rs 17,000 crore. The cut-off commission rate for the ACU portion was set at 0.74 paise per Rs 100.
In the case of the 7.43 per cent GS 2076, the notified amount was Rs 11,000 crore. The MUC was Rs 5,502 crore, while the ACU amount accepted was Rs 5,498 crore, taking the total amount underwritten to Rs 11,000 crore. The ACU commission cut-off rate here was 0.98 paise per Rs 100.
Underwriting of government securities is a critical function performed by primary dealers to ensure smooth borrowing operations by the government. In this system, primary dealers commit to subscribing to unsold portions of government bond issuances, thereby assuring full subscription.
The ACU mechanism allows the government to allocate additional underwriting amounts through a competitive bidding process, where the commission rate is determined based on market demand.
The RBI's announcement comes as part of its routine government securities issuance calendar, which is a key instrument for managing the fiscal requirements of the government and influencing liquidity in the financial system.
Primary dealers, a select set of financial institutions authorised by the RBI, play an essential role in underwriting and distributing these securities in the secondary market.
— ANI
Reader Comments
Good to see the RBI maintaining transparency with these announcements. The ACU process ensures competitive pricing and helps reduce borrowing costs for the government. Every paise counts when we're managing such huge numbers!
Very technical stuff. But the bottom line is - these bonds help fund our national budget. With 7.43% interest on the 2076 bond, seems like the market expects inflation to stay elevated for decades. Not great news for savers.
Impressive how smoothly the system works. Primary dealers absorbing Rs 28,000 crore in a single auction is no joke. The Indian bond market is maturing. Just wish retail investors got easier access to these G-Secs without going through mutual funds.
The ACU mechanism seems efficient but I'm concerned about the total government borrowing this year. With state elections coming up, fiscal discipline might take a backseat. RBI should be vigilant about managing yield curves.
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