RBI: govt, stock - full A auction results

RBI: govt, stock - full A auction results

The Reserve Bank of India (RBI) successfully conducted an auction of two government securities on July 25, 2025, raising a total of Rs 36,000 crore. The auction, conducted using the multiple price method at the RBI's Mumbai office via its electronic platform, e-Kuber, was aimed at meeting the government's expenditure and borrowing requirements [1].

The first security, a 5.91 per cent Government Security (GS) 2028, was issued to raise Rs 6,000 crore. This security matures on June 30, 2028. The second security, a 6.33 per cent GS 2035, was issued to raise Rs 30,000 crore. This security matures on May 5, 2035. The government also kept the option open to retain an extra subscription of up to Rs 2,000 crore for each of these securities, depending on the response from investors [1].

The auction results were announced on the same day, and all successful bidders were required to make payments on July 28, 2025. Primary Dealers could submit their bids for underwriting the Additional Competitive Underwriting (ACU) portion from 9:00 a.m. to 9:30 a.m. on the day of the auction. The minimum bid size for the securities was Rs 10,000 and in multiples of Rs 10,000 thereafter [1].

Investors had the opportunity to participate through the non-competitive bidding facility, including via the RBI Retail Direct platform. These securities were eligible for repurchase transactions (repo) and were open for investment by non-resident investors under the Fully Accessible Route (FAR) as per RBI guidelines [1].

The funds raised through this auction will support the government's expenditure and borrowing requirements, helping to finance infrastructure, welfare schemes, salaries, subsidies, and other development programs without immediately raising taxes [1].

The auction comes amid a cautious market sentiment due to uncertainty around the U.S.-India trade deal and policy easing cues from the Indian and U.S. central banks. The yield on the benchmark 10-year bond was steady at 6.3280% as of 10:50 am IST, compared with the previous close of 6.3276% [2].

The RBI is expected to hold its key repo rate at 5.50% next month, following a surprisingly bigger-than-expected cut in June, but will lower it again by year-end. The U.S. Federal Reserve is widely expected to keep rates unchanged next week, with investors pricing in a near 62% chance of a rate cut in September [2].

The RBI also conducted a variable rate reverse repo (VRRR) operation on the same day to absorb Rs 1.25 lakh crore, following repo injections amid fluctuating call rates and surplus liquidity. This move comes ahead of the key government securities auction [3].

References:

[1] https://www.tribuneindia.com/news/business/govt-to-raise-rs-36000-crores-through-two-securities-maturing-in-2028-and-2035/
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L4N3TM0AX:0-india-bonds-steady-ahead-of-weekly-debt-sale/
[3] https://m.economictimes.com/markets/forex/rbi-begins-fine-tuning-rates-by-conducting-simultaneous-vrr-and-vrrr-auctions/articleshow/122901383.cms