RBI's ₹30,000 Crore G-Sec Auction: Full Acceptance Signals Strong Demand

According to the RBI statement, the total notified amount for the 6.01 per cent Government Security 2030 was Rs 18,000 crore, while that for the 7.09 per cent Government Security 2074 was Rs 12,000 crore.

The cut-off price for the 6.01 per cent GS 2030 stood at Rs 99.52, corresponding to an implicit yield of 6.1252 per cent, whereas the 7.09 per cent GS 2074 was cut off at Rs 98.80, with a yield of 7.1782 per cent.

The entire notified amount was accepted in both cases, and there was no devolvement on primary dealers, the central bank said.

The central bank plays a critical role in managing the government's market borrowing programme through periodic auctions, maintaining financial stability, and ensuring adequate demand across the yield curve.

Government securities (G-secs) are debt instruments issued by central or state governments to borrow money from the public for a specified period.

Governments issue G-secs to finance their expenditures, bridge budget deficits, and fund projects like infrastructure development.

For investors, they are considered safe, low-risk, fixed-income investments that offer regular interest payments and a return of the principal amount at maturity.

Last month, states mobilised Rs 25,000 crore through the auction of State Government Securities (SGS) held on September 23, with cut-off yields largely in the range of 7.26-7.45 per cent, according to the Reserve Bank of India (RBI).

Bihar, Chhattisgarh, Gujarat, Kerala, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Telangana and West Bengal were among the participating states. The notified total amount for the auction stood at Rs 27,000 crore, while the total allotment amounted to Rs 25,000 crore.

Telangana was a large borrower, raising a total of Rs 5,000 crore through four tranches of 22 to 26 years maturity, all at a uniform cut-off yield of 7.44 per cent.

- ANI