India Gears Up for Massive ₹580 Bn Bond Auction: Key 2040 & 2065 Securities in Focus

India's Finance Ministry revealed plans for a substantial ₹580 billion government securities auction on February 6, 2026, spotlighting specific allocations for benchmark bonds. The sale includes ₹160 billion of the 6.68% coupon 2040 maturity and ₹130 billion of the 6.9% 2065 ultra-long bond, alongside other tenors to meet quarterly borrowing needs.

This auction arrives post the FY27 Union Budget (presented Feb 1), which outlined moderated fiscal consolidation to 4.3% GDP deficit while sustaining 3.1% GDP capex. Long-dated bonds like 2040 and 2065 gauge investor appetite for duration amid RBI's steady repo rate (6.5%) and global uncertainties.

Strong domestic demand from banks, insurers, and FPIs has characterized recent auctions, with 2065s gaining traction for pension/insurance liabilities matching. Yields may firm slightly post-budget's growth-neutral stance, per Fitch analysis. Successful auctions reinforce India's 'BBB-' rating outlook.

Primary dealers anticipate robust bidding, supporting FY27 gross borrowing calendar.

Key Highlights

• Total Auction Size: ₹580 billion across multiple tenors.
• 6.68% 2040 Bonds: ₹160 billion indicated auction size.
• 6.9% 2065 Bonds: ₹130 billion for ultra-long duration.
• Auction Date: Friday, February 6, 2026.
• Context: Follows FY27 budget targeting 4.3% fiscal deficit.
• Market Impact: Tests demand for long-dated sovereign debt amid global yield shifts.

Sources: Finance Ministry RBI notifications, Economic Times, Business Standard