RBI announces underwriting auction results for three government securities
Mumbai, May 22
The Reserve Bank of India on Friday announced the results of the underwriting auction conducted for Additional Competitive Underwriting of three Government of India securities, setting cut-off commission rates for primary dealers.
According to the central bank, the auction was held on May 22, 2026, for the 6.03 per cent Government Security (GS) 2029, a 6.68 per cent Government Security (GS) maturing in 2033, and a 7.24 per cent Government Security (GS) maturing in 2055. 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 6.03 per cent GS 2029, the notified amount was Rs 11,000 crore. The minimum underwriting commitment (MUC) stood at Rs 5,502 crore, with the remaining Rs 5,498 crore accepted under ACU. The total amount underwritten was thus Rs 11,000 crore. The cut-off commission rate for the ACU portion was set at Rs 1.78 per Rs 100.
In the case of the 6.68 per cent GS 2033, 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 0.88 paise per Rs 100.
And finally, for the 7.24 per cent GS 2055, the notified amount was Rs 10,000 crore. The MUC was Rs 5,019 crore, while the ACU amount accepted was Rs 4,981 crore, taking the total amount underwritten to Rs 10,000 crore. The ACU commission cut-off rate here was 0.88 paise per Rs 100.
The RBI said that the actual auction for the sale of these securities would also be held on May 22, 2026, subsequent to the completion of the underwriting process.
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
These underwriting auctions are essential for liquidity management. The cut-off rates look competitive and reflect current market conditions. It's good to see the government's borrowing program is on track despite global uncertainties.
Honestly, as a retail investor, I never really understood how these underwriting things work until now. So primary dealers basically act as safety nets for government bonds? That's clever. But I wish RBI could simplify this process for regular folks like us trying to understand where our tax money is going. 🧮
Good to see the ACU mechanism working efficiently. The 0.88 paise commission for the 2033 and 2055 bonds is reasonable. But why is the commission for the 2029 bond so much higher? Maybe there's some perception of credit risk or maybe the dealers just wanted a better deal for the shorter tenure. 🤔
This is a classic example of how government bond markets are structured in emerging economies. The RBI deserves credit for maintaining transparency with these routine announcements.
It's good that these processes are public, but don't you think it's a bit concerning that the government is borrowing so much? Rs 32,000 crore just for these three bonds in one day! That's a lot of debt to pass on to future generations. I know fiscal deficit is needed sometimes, but still... 😟
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.