Daijiworld Media Network – Mumbai

Mumbai, Apr 19: The Reserve Bank of India (RBI) has announced that several state governments will collectively raise Rs 16,900 crore through a revised auction of State Government Securities (SGS) scheduled for April 21.

According to an official release, the auction will be conducted via the RBI’s Core Banking Solution platform, E-Kuber, and will include a mix of fresh issuances as well as re-issuances across varying tenors.

Among the participating states, Andhra Pradesh plans to mobilise Rs 4,600 crore through three securities with maturities of 8, 16 and 30 years. Maharashtra will raise Rs 4,000 crore through securities with tenors of 8, 18 and 28 years, while Rajasthan will also seek Rs 4,000 crore through a combination of fresh issues and re-issuances, including the 7.99 per cent Rajasthan SGS 2041.

Telangana is set to borrow Rs 3,000 crore through three securities of 7, 11 and 21 years, each worth Rs 1,000 crore. Punjab will raise Rs 1,300 crore via a 12-year security.

The RBI stated that both competitive and non-competitive bids must be submitted electronically through the E-Kuber system on the day of the auction. Under the non-competitive bidding facility, up to 10 per cent of the notified amount of each security will be reserved for eligible participants, with a cap of 1 per cent per bid.

Retail investors can also participate through the RBI’s Retail Direct platform.

The results of the auction will be announced on April 21, with successful bidders required to complete payments on April 22 during banking hours at Mumbai and respective RBI regional offices.

The central bank further clarified that interest rates for new securities will be determined during the auction, with interest payable half-yearly on October 22 and April 22 until maturity. Re-issued securities will carry the original interest rates set at the time of their initial issuance.