The Government of India will on December 15, 2023 auction dated securities worth Rs. 33,000 crores, including 7.37% GS 2028, 7.18% GS 2033 and 7.46% GS 2073.
Centre will have the option to retain additional subscriptions up to Rs 2,000 crore against each security mentioned above, the release said. The auctions for 7.37% GS 2028 for Rs 7,000 crore, and 7.18% GS 2033 for Rs 16,000 crore, will be conducted using the uniform price method and 7.46% GS 2073 for Rs 10,000 crore using multiple price method. As all securities are new the auction will be yield-based.
Up to 5 per cent of the notified amount for sale will be allotted to eligible individuals and institutions in non-competitive bidding. 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.
The Stocks will be issued for a minimum amount of Rs 10,000 and in multiples of Rs 10,000 thereafter. The non-competitive bids should be submitted between 10:30 a.m. and 11:00 a.m. and the competitive bids should be submitted between 10:30 a.m. and 11:30 a.m. The result of the auctions will be announced on the same day, i.e. December 15, 2023, and payment by successful bidders should be done on December 18, 2023.
The coupon rates for the securities are rates denoted in the name of securities and interest thus accrued will be paid to investors on a half-yearly basis.
Long-term government bonds, renowned for stability, are a compelling option for investors seeking safer returns in their portfolios. These bonds, typically with maturities of seven years or more, can be traded in the secondary market, providing liquidity. However, investors must be aware of potential price fluctuations in the secondary market, which could result in capital losses if bonds are sold at lower prices.
These bonds otherwise can be redeemed only at maturity. Individuals above 60 years old can do premature withdrawals after four or five years, depending on the specific bond. Additionally, investors should account for taxes on the interest earned, as it forms part of their taxable income. You can invest in government bonds through banks, post offices, brokerage firms, gilt mutual funds, and the RBI Retail Direct scheme, each with its distinct advantages. For instance, opting for gilt mutual funds grants the convenience of a professional fund manager selecting bonds on your behalf, but investors have to pay management charges for that service.
