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Informist, Thursday, Aug. 6, 2026

 

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--RBI: Accepted INR-57.12-bln offers at gilt buyback auction 
--CONTEXT: Govt offered to buy back INR-200-bln gilts via auction
--RBI: Got INR-103.34-bln offers at gilt buyback auction 
--RBI: Govt bought back INR 10.00 bln of 7.33%, 2026 gilt
--RBI: Govt bought back INR 33.60 bln of 5.74%, 2026 gilt
--RBI: Govt bought back INR 4.48 bln of 8.15%, 2026 gilt
--RBI: Govt bought back INR 9.04 bln of 8.24%, 2027 gilt 
--RBI sets INR 100.45 cut-off for 7.33%, 2026 gilt at buyback 
--RBI sets INR 100.10 cut-off for 5.74%, 2026 gilt at buyback
--RBI sets INR 100.81 cut-off for 8.15%, 2026 gilt at buyback 
--RBI sets INR 101.39 cut-off for 8.24%, 2027 gilt at buyback 

 

MUMBAI – The government Thursday bought back four gilts maturing in the financial year 2026-27 (Apr-Mar) worth INR 57.12 billion against the notified amount of INR 200 billion. The response was worse than at the previous auction, when the government had got offers of nearly 170 billion for the same bonds. Thursday, the Reserve Bank of India received offers worth INR 103.34 billion at the auction.

 

The government bought back the 7.33%, 2026; the 5.74%, 2026; the 8.15%, 2026; and the 8.24%, 2027 bonds at the auction, all of which will mature in the current financial year. Cut-off prices on the bonds were largely around prices indicated by Financial Benchmarks India Ltd. Wednesday, with the exception of the 8.24%, 2027 bond. The 2027 bond's cut-off price was higher than indicative levels, as was the case at last week's auction. 

 

An Informist Poll of nine market participants had estimated cut-off prices at indicative levels. Participants in the poll had expected the RBI to accept offers for around INR 100 billion at the auction. Several banks did not have these securities in their books, limiting participation, dealers said. The short-term bonds also did not offer much opportunity to take profits, they added.

 

"Most of the banks didn't have this stock and a lot of the in-the-money stock would have been sold last week," a dealer at a foreign bank said. "With liquidity now rising to a surplus, I think this will be the last buyback auction (in the near future)." The RBI's net liquidity absorbed -- an indicator of the systemic liquidity deficit -- rose to INR 3.44 trillion Wednesday, the highest since April.

 

There were no allocations made for buybacks in the Union Budget for FY27. The purchases will not have a fiscal impact as the bonds on offer all mature within the same fiscal year, essentially being prepaid by the government, slightly reducing its interest outgo. The government is unlikely to buy back bonds maturing in subsequent financial years even if it continues such auctions monthly, dealers said. This is because spending may be higher than budgeted as the government offsets the impact of the war in West Asia on the economy, with a potential slowdown in tax revenues, they said.

 

The RBI detailed the result of the buyback of government bonds held Monday as follows:

 

Result summary
Aggregate amount notified by RBI	INR 200.00 bln
Total amount offered by participants	INR 103.34 bln
Total amount accepted by RBI	INR 57.12 bln

 

Details of each security
Security	7.33%, 2026 gilt	5.74%, 2026 gilt	8.15%, 2026 gilt	8.24%, 2027 gilt
Number of offers received	7	11	9	9
Total amount offered (in INR bln)	30.11	48.97	13.43	10.84
Number of offers accepted	2	6	5	4
Total amount accepted by RBI (in INR bln)	10.00	33.60	4.48	9.04
Cut-off price (in INR)	100.45	100.10	100.81	101.39
Weighted avg price (in INR)	100.45	100.09	100.81	101.38

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Aaryan Khanna

Edited by Rajeev Pai

 

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