RBI accepts only ₹10,513 crore offers for G-Sec buyback

The Reserve Bank of India accepted offers to buy Government Securities (G-Secs/GS) aggregating only ₹10,513 crore despite receiving offers amounting to 1.33 times the notified amount of ₹40,000 crore at the buyback of these securities on Thursday

Market players say banks would have offered to sell the government securities/GS to the government at a higher price. So, the central bank would have rejected the offers which were out of sync with secondary market prices.

• Also read: Green financing: India auctioned ₹20,000 crore worth sovereign green bonds in FY24

The government had on May 3 announced buyback of three short-term securities – 6.18 per cent GS 2024, 9.15 per cent GS 2024 and 6.89 per cent GS 2025. Auction for the same was held on Thursday.

Marzban Irani, CIO-Fixed Income, LIC Mutual Fund, observed that the government is flush with funds (April 2024 net GST collections were at ₹1.92-lakh crore). This coupled with expected dividend declaration by RBI may have prompted it go in for buyback of G-Secs.

23 offers rejected

The central bank rejected all 23 offers it received aggregating ₹7,484.473 crore (face value) at the auction of the 2025 paper.

Out of 47 offers that the central bank received aggregating ₹28,464.954 crore at the auction of the 6.18 per cent GS 2024, RBI accepted 10 offers aggregating ₹437.053 crore at a cut-off price of ₹99.59.

Out of 20 offers that the central bank received aggregating ₹17,384.552 crore at the auction of the 9.15 per cent GS 2024, RBI accepted four offers aggregating ₹10,075.940 crore at a cut-off price of ₹101.02.

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