Centre to auction Rs 32,000 crore government bonds on September 26

The Ministry of Finance will raise Rs 32,000 crore through the sale of two long-term government securities in an auction to be conducted by the Reserve Bank of India (RBI) on September 26 in Mumbai, according to an official statement.

Two lots of Rs 16,000 crore each

The first lot is the "6.68 per cent Government Security 2040" worth Rs 16,000 crore, while the second is the "6.90 per cent Government Security 2065" for an equal amount. Both will be sold through a price-based auction using the multiple price method.

Add Zee Business as a Preferred Source

The government may also retain an additional subscription of up to Rs 2,000 crore for each security, taking the total possible mobilisation to Rs 36,000 crore.

Auction process and schedule

As per RBI guidelines, up to 5 per cent of the notified amount will be reserved for eligible retail and institutional investors under the non-competitive bidding facility.

Bidding will take place through the RBI's E-Kuber platform. Non-competitive bids can be submitted between 10:30 a.m. and 11:00 a.m., while competitive bids will be accepted up to 11:30 a.m. on September 26.

The results will be declared the same day, with successful bidders required to make payments by Monday, September 29.

Eligible for 'When Issued' trading

The bonds will be eligible for ‘When Issued’ trading, which permits buying and selling ahead of their formal issue date. Introduced under the RBI’s 2018 guidelines, the facility is designed to improve price discovery and add depth to the market.

Safe investment option

Government securities are bonds issued by the Centre to raise funds for public expenditure. With the backing of a sovereign guarantee, they are widely regarded as a low-risk option for investors, although their yields are typically lower than those of corporate debt.