State Governments offering to sell 10 year securities

Newsroom24x7 Desk

govt securitiesMumbai, Feb. 6: Thirteen State Governments have offered to sell 10 year securities by way of auction for an aggregate amount of Rs. 11,620 crore at Face Value. The states offering to sell 10 year securities by auction to raise between  Rs. 1000 crore to Rs. 1500 crore are Gujarat, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Tamil Nadu and Uttar Pradesh.

The State-wise break up is as follows:

Sr. No. State Amount to be raised (Rs. crore) Tenure Years
1 Bihar 600 10
2 Gujarat* 1200 10
3 Haryana 750 10
4 Himachal Pradesh 95 10
5 Karnataka 1500 10
6 Kerala 1000 10
7 Madhya Pradesh 1000 10
8 Maharashtra 1200 10
9 Meghalaya 75 10
10 Punjab 750 10
11 Rajasthan 750 10
12 Tamilnadu* 1200 10
13 Uttar Pradesh 1500 10
Total 11620
*Gujarat and Tamil Nadu will have option to retain additional Rs. 360 cr and Rs. 300 cr respectively.

The auction will be conducted on the Reserve Bank of India Core banking Solution (E-Kuber) system on February 10, 2015 (Tuesday). The Government Stock up to 10 % of the notified amount of the sale of each of the stock will be allotted to eligible individuals and institutions subject to a maximum limit of 1 % of its notified amount for a single bid per stock as per the Scheme for Non-competitive Bidding Facility (available on RBI website).

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core banking Solution (E-Kuber) system on February 10, 2015 (Tuesday). The non-competitive bids should be submitted between 10.30 A.M. and 11.30 A.M. and the competitive bids should be submitted between 10.30 A.M. and 12.00 noon.

The yield percent per annum expected by the bidder should be expressed up to two decimal points. An investor can submit more than one competitive bid at different prices in electronic format on the Reserve Bank of India Core banking Solution (E-Kuber) system. However, the aggregate amount of bids submitted by a bidder should not exceed the notified amount for each State.

The Reserve Bank of India will determine the maximum yield/minimum price at which bids will be accepted. Securities will be issued for a minimum nominal amount of Rs 10,000.00 and multiples of Rs. 10,000.00 thereafter.

The results of the auction will be announced on February 10, 2015 (Tuesday) and payment by successful bidders will be made during banking hours on February 11, 2015 (Wednesday) at Mumbai and at respective Regional Offices of RBI.

The State Government Stocks will bear interest at the rates determined by RBI at the auctions. Interest will be paid half yearly on August 11 and February 11 of each year till maturity for all states. The Stocks will be governed by the provisions of the Government Securities Act, 2006 and Government Securities Regulations, 2007.

The investment in State Government Stocks will be reckoned as an eligible investment in Government Securities by banks for the purpose of Statutory Liquidity Ratio (SLR) under Section 24 of the Banking Regulation Act, 1949. The stocks will qualify for the ready forward facility.

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