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Our Bureau

Mumbai , May 3

THE auctions of the 7.55-Government Stock 2010 and the 7.50-Government Stock 2034 were oversubscribed on Tuesday.

The bond market saw a rally due to the cut-off price for the bond auctions being higher than market expectations.

For the 7.55 paper, the notified amount was Rs 6,000 crore. The Reserve Bank of India (RBI) received 387 competitive bids amounting to Rs 21,535 crore.

The cut-off price was Rs 102.33 (6.99 per cent YTM). The RBI accepted 68 bids, amounting to Rs 5971.19 crore.

The partial allotment amounted to 36 per cent from nine bids. The amount of underwriting accepted from primary dealers was Rs 5,055 crore. The weighted average price was Rs 102.40. The RBI also received 12 non-competitive bids, amounting to Rs 28.81 crore.

A primary dealer said that the market was expecting the cut-off price for the paper to be around Rs 102.25/30.

As the cut-off price was higher than market expectations, the sentiment changed to positive and demand for the auction papers increased.

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