The Finance Ministry has advanced the auction for Inflation Indexed bond.

The Ministry intends to auction the next tranche of the bonds to institutional investors. “Auction will take place on June 25 against earlier plan of first week of July,” a source said.

Now, IIB auctions will be held every fortnight instead of a monthly basis. The Government plans to raise Rs 12,000 crore in first half of 2013-14.

The source also added that the Government plans more frequent auctions, better benchmarking for retail tranche and issue bonds solely for retail investors in the second half of the fiscal starting September 1.

Inflation indexed bonds is being introduced to give retail investors an alternative option to gold. These auctions will help in fixing the interest rate on IIB which will be later offered as National Security Certificate to retail investors.

These certificates will be distributed through post offices. Under such instrument, the principal will be protected against inflation while interest will be adjusted accordingly.

(This article was published on June 19, 2013)
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