India’s ₹1.9 Trillion Bond Switch: Govt to Conduct Auction on October 20

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The Government of India has announced a ₹1.9 trillion (₹190 billion) securities conversion/switch auction scheduled for October 20, 2025. Managed by the Reserve Bank of India, the move aims to optimize debt maturity profiles and improve liquidity. Eligible participants include banks, financial institutions, and primary dealers under competitive bidding norms.

Govt of India to Conduct ₹190 Billion Securities Switch Auction on October 20

In a strategic move to manage its debt portfolio, the Government of India, through the Reserve Bank of India (RBI), has announced a conversion/switch auction of government securities worth ₹190 billion (₹19,000 crore). The auction is scheduled for October 20, 2025, and is part of the government’s ongoing efforts to optimize its debt servicing and maturity structure.

Key Highlights from the Auction Announcement:

Purpose of the Switch

The conversion/switch aims to replace short-term maturing securities with longer-dated instruments.

This helps in smoothing redemption pressures and reducing rollover risks in future fiscal years.

Auction Details

The auction will be conducted by the RBI on behalf of the Government of India.

It will follow a competitive bidding format, open to eligible participants such as banks, primary dealers, and financial institutions.

Eligible Securities

Specific source and destination securities will be notified closer to the auction date.

Past switches have involved bonds maturing between 2026 and 2028, converted into longer-term papers maturing in 2033 to 2039.

Market Impact

Such switches are expected to enhance liquidity in longer-tenure bonds and support yield curve management.

They also provide institutional investors with opportunities to rebalance portfolios.

Policy Context

The move aligns with India’s broader fiscal strategy to manage public debt efficiently amid global economic uncertainties.

It reflects the government’s commitment to transparent and market-friendly debt operations.

Investor Participation

Non-competitive bidding is also allowed for certain categories, ensuring wider market access.

Participants must adhere to RBI’s auction guidelines and settlement protocols.

This ₹190 billion switch auction is a key instrument in India’s debt management toolkit, balancing fiscal prudence with market stability.

Sources: Reserve Bank of India, Axis Bank – Auction Process, Business Standard

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