Tag: PD

The Reserve Bank of India (RBI) devolved about 53 per cent of the notified amount of ₹14,000 crore on primary dealers (PDs) at the auction of the benchmark Government Security (G-Sec/GS) maturing in 2030.

However, the auction of the other two G-Secs (4.26 per cent GS 2023 and 6.76 per cent GS 2061) sailed through.

Marzban Irani, CIO-Fixed Income, LIC Mutual Fund, observed that RBI set relatively higher cut-off rate for additional competitive underwriting (ACU) commission for PDs for the 2030 G-Sec, indicating that market participants were not too keen on buying the paper.

The ACU commission was 13 paise for 2061 G-Sec and 0.42 paise for 2023 G-Sec.

RBI devolved ₹7,436.458 crore worth of the 2030 G-Sec (coupon rate: 5.85 per cent) on PDs. It accepted bids aggregating ₹6,563.542 crore for this paper.

The central bank set a cut-off price of ₹98.97 (yield: 5.9937 per cent) for this paper against its previous closing price of ₹99.015 (5.9873 per cent). Bond yield and price are inversely related and move in opposite directions.

In the secondary market, the 2030 G-Sec closed at ₹98.90 (6.0035 per cent).

RBI accepted bids aggregating ₹3,550 crore for the 2023 G-Sec (against the notified amount of ₹3,000 crore). It accepted bids aggregating to the notified amount of ₹9,000 crore in the case of the 2061 G-Sec.