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Informist, Thursday, Sept. 3, 2026

 

--RBI: Did not accept any offers at gilt buyback auction 

--CONTEXT: Govt offered to buy back INR-300-bln gilts via auction 

--RBI: Got INR-31.09-bln offers at gilt buyback auction 

 

MUMBAI – The Reserve Bank of India Thursday rejected all offers for the four gilts maturing in the financial year 2026-27 (Apr-Mar) that the Centre had offered to buy back through auction. It received offers worth INR 31.09 billion, a puny amount against the notified amount of INR 300 billion. The response was worse than at the previous auction on Aug. 6, when the central bank had received offers of INR 103.34 billion against a notified size of INR 200 billion for the same four bonds. At that auction, the government had bought back gilts worth INR 57.12 billion.

 

The government had invited offers to buy back the 7.33%, 2026 bond; the 5.74%, 2026 bond; the 8.15%, 2026 bond; and the 8.24%, 2027 bond. Traders had expected participation at the auction to be poor, with some even anticipating a cancellation. "Very few banks hold these securities after the previous auction; the same securities they have been announcing for the last three auctions," a dealer at a private-sector bank said. "Not a lot of people were even interested at these levels."

 

An Informist Poll of six market participants had estimated the cut-off prices to be largely near the prices indicated by Financial Benchmarks India Pvt. Ltd. Wednesday. Several banks did not hold the securities, limiting participation at the auction, dealers said. For those who did hold the bonds, the sharp rise in yields this week did not make the current levels appealing to sell while ample liquidity in the banking system removed any vestige of an incentive to sell for cash, dealers said.

 

There were no allocations made for buybacks in the Union Budget for FY27. The government has so far bought back INR 257 billion of these four bonds in the year. It is unlikely to buy back bonds maturing in subsequent financial years even if it continues to hold buyback auctions, dealers said. This is because spending may be higher than budgeted as the government works to offset 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 Thursday as follows:

 

Result Summary
Aggregate amount notified by RBI	INR 300.00 bln
Total amount offered by participants	INR 31.09 bln
Total amount accepted by RBI	NIL

 

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	3	3	7	11
Total amount offered (in INR bln)	7.50	4.40	8.19	11.00
Number of offers accepted	NIL	NIL	NIL	NIL
Total amount accepted by RBI (in INR bln)	NIL	NIL	NIL	NIL
Cut-off price (in INR)	-	-	-	-
Weighted Avg. Price (in INR)	-	-	-	-

 

End

 

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

 

Reported by Diksha Tripathy

Edited by Rajeev Pai

 

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