What changed
This circular announces the auction of four government securities (8.35% GS 2022, 8.24% GS 2027, 9.20% GS 2030, 9.23% GS 2043) for a total notified amount of ₹20,000 crore. The auction uses a uniform price method, with both competitive and non-competitive bidding on the E-Kuber platform. Non-competitive bids are capped at 5% of the notified amount per security.
What it means for you
Banks and primary dealers must prepare for a price-based auction with a uniform price, meaning all successful bidders pay the same price. The non-competitive facility allows smaller investors to participate via banks, with allotment at the weighted average rate. Securities are eligible for ready forward and 'When Issued' trading, enhancing liquidity.
What you must do
- Submit competitive bids on E-Kuber between 10:30 AM and 12:00 noon on April 17, 2014.
- Submit consolidated non-competitive bids for clients between 10:30 AM and 11:30 AM on the same day.
- Ensure bids are in electronic format; physical bids only in extraordinary circumstances.
- Prepare for settlement on April 21, 2014, with payment via SGL or stock certificate.
- Note the minimum bid amount of ₹10,000 and multiples thereof.
Who it affects
All Scheduled Commercial Banks, All State Co-operative Banks, All Scheduled Primary (Urban) Co-operative Banks, All Financial Institutions, All Primary Dealers
What is the auction method for these securities?
The auction uses a uniform price method, where all successful bidders pay the same price determined by the competitive bidding process.
Can individuals participate directly in the auction?
Individuals can participate via the non-competitive bidding facility, which is capped at 5% of the notified amount. Banks submit consolidated non-competitive bids on their behalf.
What are the settlement and trading details?
Settlement is on April 21, 2014. The securities are eligible for ready forward facility and 'When Issued' trading from April 15 to April 17, 2014.