India’s Central Bank Sets Underwriting Commitments for Government Securities Ahead of June 13 Auction

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The Reserve Bank of India (RBI) has announced minimum underwriting commitments for key government securities ahead of the scheduled auction on June 13, 2025. The auction, which will be conducted via RBI’s e-Kuber platform, includes sovereign green bonds and long-term government securities aimed at financing sustainable projects and managing national debt.

Key highlights of the underwriting commitments
- RBI has set a minimum underwriting commitment of 3.34 billion rupees for government securities maturing in 2074.
- The underwriting commitment for the 6.98 percent sovereign green bond maturing in 2054 stands at 1.2 billion rupees.
- Government securities maturing in 2031 will require a minimum underwriting commitment of 2.62 billion rupees.
- The total notified amount for the auction is 30,000 crore rupees, with additional competitive underwriting bids to be submitted by primary dealers.

Strategic impact on India’s bond market
- The auction is expected to attract significant investor interest, particularly in sovereign green bonds, which fund environmentally sustainable projects.
- The government retains the option to accept up to 2,000 crore rupees in additional subscriptions for each security.
- The reissuance of sovereign green bonds aligns with India’s broader economic and environmental goals, promoting climate-conscious investments.

Auction details and participation guidelines
- Non-competitive bids must be submitted between 10:30 a.m. and 11:00 a.m., while competitive bids will be accepted until 11:30 a.m. on June 13.
- The results will be announced on the same day, with successful bidders required to make payments by June 16.
- Securities will be eligible for “When Issued” trading from June 10 to June 13, allowing investors to trade them before formal issuance.

About the Reserve Bank of India and government securities
The Reserve Bank of India manages the issuance and auction of government securities, ensuring liquidity and stability in the financial markets. Sovereign green bonds are specifically designed to finance renewable energy, clean transportation, and other sustainability initiatives.

Sources: RBI, The Hindu BusinessLine, MSN India.