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RBI's Rs 30,000 Crore Bond Auction: What the OMO Results Reveal

The Reserve Bank of India has announced a major government securities auction. It involves selling Rs 30,000 crore worth of bonds with two different maturity dates. At the same time, the RBI has shared the results of its recent Open Market Operation purchase. This gives investors a clear picture of current bond market activity and pricing.

Key Points: RBI Announces Rs 30,000 Crore G-Sec Auction and OMO Results

  • RBI announces Rs 30,000 crore G-Sec auction split between 2030 and 2074 maturities
  • Primary Dealers must commit minimum underwriting amounts via e-Kuber system
  • Central bank reveals results of Rs 50,000 crore OMO purchase from today
  • Highest OMO acceptance was Rs 17,519 crore for the 6.54% GS 2032 security
3 min read

RBI announces Rs 30,000 crore G-Sec underwriting auction, releases OMO purchase results

RBI announces Rs 30,000 crore G-Sec underwriting auction for Dec 19 and releases cut-off details for Rs 50,000 crore OMO purchase. Get the latest bond market updates.

"The underwriting auction will be conducted through a multiple price-based method. - Reserve Bank of India"

Mumbai December 18

The Reserve Bank of India (RBI) on Thursday announced that an underwriting auction, for the sale of Government Securities amounting to Rs 30, 000 crore, will be held tomorrow.

The apex bank also released the cut-off details for its Open Market Operation (OMO) purchase of Government of India securities conducted today.

According to the RBI, the Government of India has notified the sale (re-issue) of two Government Securities through an auction scheduled for tomorrow. The securities on offer include Rs 18,000 crore of 6.01 per cent Government Security maturing in 2030 and Rs 12,000 crore of 7.09 per cent Government Security maturing in 2074.

Under the extant scheme of underwriting commitment notified on November 14, 2007, the Minimum Underwriting Commitment (MUC) and the minimum bidding commitment under the Additional Competitive Underwriting (ACU) auction have been specified for Primary Dealers (PDs). For the 6.01 per cent GS 2030, the MUC amount per PD has been fixed at Rs429 crore, with an equal minimum bidding commitment under ACU. For the 7.09 per cent GS 2074, the corresponding amount has been set at Rs286 crore.

The underwriting auction will be conducted through a multiple price-based method. Primary Dealers may submit their bids electronically through the RBI's Core Banking Solution (e-Kuber system) between 9:00 am and 9:30 am on December 19. The underwriting commission will be credited to the current accounts of the respective PDs with the RBI on the day of issue of the securities.

Separately, the central bank also announced the cut-off yields and prices for the Open Market Operation purchase of Government of India securities conducted on December 18, with an aggregate notified amount of Rs 50,000 crore. No security-wise amount was pre-notified for the operation.

The operation covered seven government securities maturing between 2029 and 2054, with no security-wise notified amount specified. The securities included 6.75 per cent GS 2029, 6.10 per cent GS 2031, 6.54 per cent GS 2032, 7.18 per cent GS 2033, 6.33 per cent GS 2035, 7.23 per cent GS 2039 and 7.09 per cent GS 2054.

The highest acceptance was for the 6.54 per cent Government Security maturing in 2032, amounting to Rs17,519 crore, followed by Rs11,801 crore for the 7.18 per cent GS 2033 and Rs9,494 crore for the 6.33 per cent GS 2035. The RBI also accepted Rs6,272 crore for the 6.10 per cent GS 2031, Rs2,744 crore for the 7.09 per cent GS 2054, Rs1,764 crore for the 6.75 per cent GS 2029 and Rs406 crore for the 7.23 per cent GS 2039.

The cut-off yields ranged from 6.1537 per cent for the 2029 security to 7.2983 per cent for the 2054 security, while cut-off prices ranged between Rs97.50 and Rs103.32. The central bank stated that detailed results of the OMO purchase will be issued shortly.

- ANI

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Reader Comments

S
Sarah B
As someone who invests in debt mutual funds, these details are crucial. The high acceptance for the 2032 GS suggests strong institutional appetite for medium-term papers. The transparency in cut-off yields is appreciated.
V
Vikram M
Issuing a 50-year bond (2074!) is a bold move. It shows confidence in the long-term Indian economy, but also highlights the government's substantial borrowing needs. Regular citizens like us just hope this doesn't crowd out credit for businesses.
P
Priya S
While the technical details are important for markets, I sometimes feel the RBI's communications could be made slightly simpler for the average saver to understand. How does this auction affect my fixed deposit rates? A layman's summary would help.
R
Rohit P
The e-Kuber system for bids is a good step towards efficiency. Hope the process is smooth for the Primary Dealers. A well-functioning bond market is the backbone for infrastructure funding. Jai Hind!
K
Karthik V
₹30,000 crore tomorrow and ₹50,000 crore today... that's a lot of government borrowing. Ultimately, it's taxpayer money that services this debt. We need to see parallel focus on boosting revenue through growth, not just managing the deficit.

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