At the auction of the benchmark Government Security (G-Sec/GS), the Reserve Bank of India (RBI) devolved approximately 53% of the mentioned amount of ₹14,000 crores on primary dealers (PDs) maturing in 2030.  Though, the auction of the other two G-Secs (4.26% GS 2023 and 6.76% GS 2061) went through.

 

shineprojects-bondsrbi-blog203

 

Marzban Irani, CIO-Fixed Income, LIC Mutual Fund, recognized that RBI set a relatively higher cut-off rate for the additional competitive underwriting (ACU) commissions for PDs for the 2030 G-Sec, symbolizing that market participant were not too enthusiastic about buying the paper. The ACU commission was 13 paise for 2061 G-Sec and 0.42 paise for 2023 G-Sec. RBI devolved ₹7,436.458 crores worth of the 2030 G-Sec having a coupon rate of 5.85% on PDs. It accepted bids collecting ₹6,563.542 crores for the paper. It also set a cut-off price of ₹98.97 having a yield of 5.9937% for this paper against its previous closing price of ₹99.015 having a yield of 5.9873%. The bond yield and price are inversely related to each other and flow in opposite directions. In the secondary market, the 2030 G-Sec closed at ₹98.90 with a yield of 6.0035%.

RBI accepted bids collecting ₹3,550 crores for the 2023 G-Sec against the notified amount of ₹3,000 crores. It accepted bids aggregating to the notified amount of ₹9,000 crores for the 2061 G-Sec.

  •   
  •   
  •   
  •