The Hindu Business Line : Dated Govt papers fully subscribed

THE dated government securities issue conducted by RBI on Monday was fully subscribed as there was appetite for the papers from banks and primary dealers, said market participants.

For the Rs 6,000-crore 7.55 per cent 2010 paper, 332 competitive bids aggregating Rs 15,541.59 crore were received of which 109 bids aggregating Rs 5,970.548 crore were accepted. Cut-off yield of the paper came at 7.1974 per cent with the cut-off price of Rs 101.58, nearly in line with market expectations, dealers said. All 12 non-competitive bids received worth Rs 29.45 crore were accepted.

The paper was last traded in the bond market at Rs 101.90.

Underwriting by primary dealers was worth Rs 4,475 crore at an underwriting commission of 20 paise per Rs 100, which is higher than usual commission of two to three paise, dealers said.

The Rs 2,000-crore 7.95 per cent 2032 paper was subscribed at a below par cut-off price of Rs 96.81 at the cut-off yield of 8.2423 per cent. 71 competitive bids aggregating Rs 2,169.09 crore were received of which 60 bids amounting to Rs 1,994.902 crore were accepted. All 5 non-competitive bids worth Rs 5.098 crore were accepted.

Meanwhile, underwriting by primary dealers for the paper amounted to Rs 245 crore at a commission of 50 paise per Rs 100, higher than commission offered in the previous auction, dealers said.

"Amid tight liquidity conditions, expectation of devolvement led to the offer of a higher commission," said a trader at a private sector bank.