The Hindu Business Line : Auction of Guj government's securities subscribed four times

The auction results of 10-year state development loans of Gujarat conducted by the Reserve Bank of India (RBI) revealed that they were subscribed four times, the officials said.

“83 competitive bids were received for an amount of Rs 4,063 crore out of which 22 bids were accepted for Rs 1,000 crore during auction of Gujarat government securities,” they added.

The Gujarat government on November 17 had announced sale of Gujarat government stock (Securities)-2018 worth Rs 1,000 crore for a tenure of 10 years to finance capital expenditure in connection with the development programmes of the state, particularly o n the schemes included in annual development plan of 2008-09.

“Mark up of 45 basis points on state loan of Gujarat as compared to 100 basis points on G-SEC (central government securities) of 10 years tenure, shows there is good market appetite for the state government loans,” official of finance department of Gujar at government said.

It means if the Central government pays interest at one per cent on market loan, state of Gujarat will have to just pay 0.45 per cent interest on market loan for 10 year period, he clarified. The auction was carried out in Mumbai yesterday, the officials added. - PTI

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