Strong Demand in Government Securities: Rs. 27,000 Crore Bonds Fully Subscribed

The government's recent auction has demonstrated strong investor confidence with Rs. 27,000 crore in bonds fully subscribed over two tranches. Conducted on May 22, the auction resulted in pricing above par for both bonds, indicating solid demand.

The 6.75% G-sec, set to mature in 2029 with a notified amount of Rs. 15,000 crore, was sold at a cut-off price of Rs. 103.49, yielding 5.8675%. Simultaneously, the 7.09% G-sec, maturing in 2054 with Rs. 12,000 crore notified, fetched Rs. 103.39 at a yield of 6.8197%. These yields suggest favorable expectations for return from the investor community.

Interestingly, the development of primary dealers was noted as 'NIL' for both bonds, a positive signal of strong investor demand. Primary Dealers, authorized by the RBI, play crucial roles in the buying and selling of government securities. The auction, held on May 23, from 9:00 to 9:30 A.M., employed a multiple price-based methodology and was executed via the Core Banking Solution, E-Kuber.

This activity aligns with the fiscal year's earlier announcement on March 27, when the government unveiled the issuance calendar for government-dated securities, including Sovereign Green Bonds. Issuing these calendars in advance aids investors in planning and ensures transparency within the Government Securities market.

(With inputs from agencies.)