RBI to Auction Rs 14,500 Crore State Government Securities on April 28

According to the central bank release, several states, including Assam, Bihar, Chhattisgarh, Kerala, Madhya Pradesh, Uttar Pradesh, and Uttarakhand, will participate in this issuance, offering securities across a range of maturities. These include both fresh issuances and re-issuances of existing securities, with tenors ranging from 3 to 23 years. Some securities will be auctioned based on yield, while others--primarily re-issued securities--will be auctioned based on price.

The auction will be conducted electronically through the RBI's Core Banking Solution, E-Kuber. Both competitive and non-competitive bids must be submitted on the same day. The bidding window for competitive participants is from 10:30 AM to 11:30 AM, while non-competitive bidders can submit their bids between 10:30 AM and 11:00 AM. Under the non-competitive bidding facility, up to 10% of the notified amount of each security is reserved for eligible individuals and institutions, subject to a cap of 1% per bidder per security. Retail investors can access this facility through the RBI Retail Direct platform.

Participants are required to quote yields or prices up to two decimal places. Multiple bids at varying yields or prices are permitted; however, the total bid amount for each state must not exceed the notified amount. The RBI will determine the cut-off yield or price for each security, which will guide the allocation. Securities will be issued in a minimum denomination of Rs 10,000 and in multiples thereof.

Auction results will be announced the same day, and successful bidders will have to complete payment by April 29, 2026, during banking hours at designated RBI offices. Newly issued securities will carry interest rates determined at the auction and will pay interest semi-annually on April 29 and October 29. Re-issued securities will retain their original coupon rates, with similar half-yearly interest payments.

Investments in SGS qualify as eligible assets for banks' Statutory Liquidity Ratio (SLR) requirements and are also eligible for repo transactions, enhancing their liquidity and attractiveness to institutional investors.

- ANI