RBI accepts INR 98.92 bln worth of offers at gilt buyback auction
This story was originally published at 17:06 IST on 16 January 2025
Register to read our real-time news.Informist, Thursday, Jan. 16, 2025
Please click here to read all liners published on this story
--RBI: Accepted INR 98.92-bln offers at gilt buyback auction
--CONTEXT: Govt offered to buy back INR 300-bln gilts via auction
--RBI: Got INR 360.52-bln offers at gilt buyback auction
--RBI: Govt bought back INR 21.80 bln of 7.72%, 2025 gilt
--RBI: Govt bought back INR 68.00 bln of 5.22%, 2025 gilt
--RBI: Govt bought back INR 2.03 bln of 8.20%, 2025 gilt
--RBI: Govt bought back INR 4.00 bln of 5.15%, 2025 gilt
--RBI: Govt bought back INR 3.09 bln of 7.59%, 2026 gilt
--RBI sets INR 100.38 cut-off for 7.72%, 2025 gilt at buyback
--RBI sets INR 99.43 cut-off for 5.22%, 2025 gilt at buyback
--RBI sets INR 100.98 cut-off for 8.20%, 2025 gilt at buyback
--RBI sets INR 98.78 cut-off for 5.15%, 2025 gilt at buyback
--RBI sets INR 100.84 cut-off for 7.59%, 2026 gilt at buyback
MUMBAI – The government bought back INR 98.92 billion worth of gilts maturing in 2025-26 (Apr-Mar) at the auction on Thursday, as against the notified amount of INR 300 billion. The Reserve Bank of India received offers worth INR 360.52 billion at the auction.
The government bought back the 7.72%, 2025 bond, the 5.22%, 2025 bond, the 8.20%, 2025 bond, the 5.15%, 2025 bond, and the 7.59%, 2026 bond at the auction. The cut-off prices for all the gilts at the auction were higher than the valuations of the bonds on Financial Benchmark India Ltd. on Wednesday. For the 7.72%, 2025 and the 8.20%, 2025 bonds, the cut-off price was up 7 paise to its valuation on Financial Benchmark India on the previous day.
"The market went up during the day, so the traders must have offered levels which were sharply above the FBIL (Financial Benchmark India Ltd.) rates and that's why RBI accepted such a low amount at the auction," a dealer at a private bank said.
This was the second buyback announcement this month. Last week, the government bought back INR 192.18 billion worth of the same five gilts, against a notified amount of INR 250 billion. So far in FY25, the government has bought back INR 1.18 trillion worth of gilts, including those maturing in the current fiscal year.
The buyback of bonds has benefitted the government in reducing its interest burden, a stated aim of finance ministry officials, dealers said. Even after the buybacks, the government is scheduled to repay INR 4.05 trillion worth of gilts in FY26.
The buyback will also inject liquidity into the banking system, which has been in deficit since mid-December. On Wednesday, the liquidity deficit in the banking system, as measured by the RBI's net injection of funds, stood at INR 2.22 trillion. On Wednesday, the RBI also announced daily overnight variable rate repo auctions effective from Thursday to manage the banking system's liquidity.
The RBI detailed the result of the buyback of government bonds held Thursday as follows:
| Result summary | |
| Aggregate amount notified by RBI | INR 300.00 bln |
| Total amount offered by participants | INR 360.52 bln |
| Total amount accepted by RBI | INR 98.92 bln |
| Details of each security | |||||
| Security | 7.72%, 2025 gilt | 5.22%, 2025 gilt | 8.20%, 2025 gilt | 5.15%, 2025 gilt | 7.59%, 2026 gilt |
| Number of offers received | 20 | 20 | 15 | 15 | 10 |
| Total amount offered (in INR bln) | 78.95 | 171.74 | 33.33 | 22.23 | 54.26 |
| Number of offers accepted | 6 | 1 | 3 | 2 | 4 |
| Total amount accepted by RBI (in INR bln) | 21.80 | 68.00 | 2.03 | 4.00 | 3.09 |
| Cut-off price (in INR) | 100.38 | 99.43 | 100.98 | 98.78 | 100.84 |
| Weighted Avg. Price (in INR) | 100.38 | 99.43 | 100.98 | 98.78 | 100.79 |
End
Reported by Vidhushi RajPurohit
Edited by Tanima Banerjee
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
