Government of India to conduct ₹30,000 crore securities switch auction

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Government securities switch auction

Highlights

The Government of India will conduct a ₹30,000 crore multi-price securities switch auction on the e-Kuber platform on July 20, 2026.
In the auction, source securities such as 6.79% GS 2027 will be switched for destination securities including 6.19% GS 2034, with a minimum bid size of ₹10,000.
Through this switch, the government will improve debt management by rolling over short-term debt into longer-term securities, while settlement will remain cash-neutral.

This article was translated from the original. Read the original version by our correspondent here.

Auction Framework and Timeline

According to the RBI press release, this multi-price auction will be held on the e-Kuber platform on Monday, July 20, 2026, from 10:30 AM to 11:30 AM. The auction results will be announced the same day, and settlement will take place on Tuesday, July 21, 2026.

The notified switch includes source securities such as 6.79% GS 2027, 6.64% GS 2027, 7.17% GS 2028, 7.06% GS 2028, 8.60% GS 2028, 7.37% GS 2028, 7.10% GS 2029, and 7.88% GS 2030. In exchange, destination securities like 6.19% GS 2034, 7.50% GS 2034, 7.10% GS 2034, 6.64% GS 2035, 6.67% GS 2035, and 7.62% GS 2039 will be offered.

The government has stated that it reserves the right to accept bids for less than the notified amount, make marginally higher purchases due to rounding effects, or accept or reject any or all bids fully or partially without assigning any reason.

Market Participation and Impact on Debt Management

Market participants must submit bids on the e-Kuber core banking system, entering both the amount of the source security and the prices of source and destination securities in Indian Rupees up to two decimal places. The quoted price of the source security must match the previous working day's FBIL closing price, otherwise the bid will be rejected.

The minimum bid size is set at ₹10,000, and bids can be placed in multiples of ₹10,000 thereafter. Successful bids will be accepted at their respective quoted prices, while the cut-off will be determined based on the price of the destination security, and if there are multiple successful bids at the cut-off, pro-rata allocation will apply.

This switch mechanism allows the government to roll over short-term debt into longer-term securities. Although the conversion is described as broadly cash-neutral, fund settlement for each bid will be based on net accrued interest and cash adjustments arising from rounding.

In our previous report, we provided an update on the rebalancing and inclusion/exclusion in several Nifty indices following the merger of J.B. Chemicals & Pharmaceuticals Ltd. with Torrent Pharmaceuticals Ltd. by NSE Indices Limited. It was mentioned that these changes will take effect from July 17, 2026, and could directly impact Nifty-tracking products such as index funds, ETFs, and derivatives.

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