The Reserve Bank of India on Friday conducted an auction of two long dated government securities, the 6.68% GS 2040 and the 6.90% GS 2065, with demand remaining healthy and underwriting fully covering the notified amounts, resulting in no devolvement on primary dealers.
For the 6.68% Government Security maturing in 2040, the Reserve Bank of India had notified an issuance of Rs 16,000 crore. Competitive bids worth Rs 40,282 crore were received, more than two and a half intimes the offer size, underscoring strong vestor appetite for the tenor. The cut off price was set at 95.67, translating into a yield of 7.1658%. The RBI accepted Rs 15,976.01 crore through competitive bids, with partial allotment applied to 17 bids. The weighted average price came in at 95.70, implying a yield of 7.1623%. Non competitive bids of Rs 23.99 crore were received and accepted in full.
In the 6.90% Government Security maturing in 2065, the notified amount stood at Rs 13,000 crore, while competitive bids aggregated Rs 24,335 crore. The cut off price was fixed at 92.53, corresponding to a yield of 7.4917%. Competitive bids accepted totalled Rs 12,975.88 crore, with partial allotment applied to two bids. The weighted average price for the bond was 92.84, implying a yield of 7.4654%. Non competitive bids amounting to Rs 24.12 crore were fully accepted.
Underwriting commitments from primary dealers covered the entire notified amount for both securities. The Reserve Bank of India accepted underwriting of Rs 16,000 crore for the 6.68% GS 2040 and Rs 13,000 crore for the 6.90% GS 2065. There was no devolvement on primary dealers, underscoring a smooth auction and adequate demand in the government bond market.