What changed
The Government of India is re-issuing four dated securities with a combined notified amount of ₹16,000 crore. The auction will be conducted through a price-based uniform price method on the RBI's E-Kuber platform. Key dates: auction on May 9, 2014, and settlement on May 12, 2014.
What it means for you
Banks and primary dealers must prepare to bid in this auction, which offers securities maturing in 2020, 2023, 2032, and 2042. The uniform price method means all successful bidders pay the same price. Non-competitive bidding is available for eligible individuals and institutions, with allotment at the weighted average rate.
What you must do
- Submit competitive and non-competitive bids electronically on E-Kuber by the deadlines on May 9, 2014.
- Ensure non-competitive bids are consolidated per bank/PD and submitted between 10:30 AM and 11:30 AM.
- Verify that the aggregate amount of bids per person does not exceed the notified amount of the auction.
- Prepare for settlement on May 12, 2014, and note that securities qualify for ready forward and 'When Issued' trading from May 6-9, 2014.
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 minimum bid amount for these securities?
The minimum bid amount is ₹10,000 (nominal), and bids must be in multiples of ₹10,000 thereafter.
Can I submit multiple competitive bids?
Yes, an investor can submit more than one competitive bid at different prices, but the total amount of all bids must not exceed the notified amount of the auction.
How will non-competitive bidders be allotted?
Non-competitive bidders will receive allotment at the weighted average rate of yield/price that emerges from the competitive bidding in the auction.