Now Reading: RBI auctions Rs 32k cr govt stock; states to raise Rs 15,300 cr
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RBI auctions Rs 32k cr govt stock; states to raise Rs 15,300 cr
The Reserve Bank of India conducted two auctions on Tuesday, raising Rs 32,000 crore through central government securities. The 6.36% GS 2031 (10-year) saw strong demand: bids worth Rs 50,030 crore against…
The Story in Brief
The Reserve Bank of India conducted two auctions on Tuesday, raising Rs 32,000 crore through central government securities. The 6.36% GS 2031 (10-year) saw strong demand: bids worth Rs 50,030 crore against Rs 21,000 crore notified, a bid-to-cover ratio of 2.38. The 7.71% GS 2066 (30-year) attracted Rs 34,560 crore in bids against Rs 11,000 crore notified, but only 20 bids were accepted, suggesting selective buying at the cut-off yield of 7.56%.
Separately, six state governments will raise Rs 15,300 crore on August 11 through auctions of securities ranging from 9 to 30 years. Andhra Pradesh, Gujarat, Maharashtra, Meghalaya, Punjab and Rajasthan are issuing new or re-issued stock. Retail investors can participate via the RBI Retail Direct portal or non-competitive bidding, with a maximum allotment of 10% of the notified amount per stock.
The Indian Opinion
The auction numbers show demand for long-dated paper remains tepid: only 20 of 242 competitive bids for the 30-year 7.71% bond were accepted. Yet the government lowballed the yield at 7.56%, barely above the cut-off. Retail investors should watch the weighted average yield (7.55%) on the 2066 security, that is the true price the market paid, not the headline coupon. If future auctions see even wider bid-to-cover gaps, the narrative that 'India's debt is always oversubscribed' will need a hard reset.
Sources (2): rbi.org.in, rbi.org.in (2)
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
