RBI released the results of the government securities switch auction

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RBI switch auction results

Highlights

RBI issued long-term securities worth ₹16,000 crore in the switch auction in exchange for 6.79% GS 2027, 6.64% GS 2027, 7.17% GS 2028, and 7.06% GS 2028.
Full acceptance of the notified amount in the 6.79% GS 2027 and 7.06% GS 2028 groups, while lower acceptance and reduced investor demand were seen in 6.64% GS 2027 and 7.17% GS 2028.
No bids were accepted for 8.60% GS 2028 and 7.37% GS 2028, while a total of ₹4,839 crore was accepted in the 7.10% GS 2029 and 7.88% GS 2030 groups, highlighting the demand fabric.

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

Auction Results and Accepted Amounts

According to the Reserve Bank of India press release 2026-2027/714, 6.79% GS 2027, 6.64% GS 2027, 7.17% GS 2028, and 7.06% GS 2028 were switched for 6.19% GS 2034, 6.67% GS 2035, 7.50% GS 2034, and 7.62% GS 2039, respectively. The notified amounts for these four source securities were ₹4,000 crore, ₹4,000 crore, ₹3,000 crore, and ₹5,000 crore, respectively.

For 6.79% GS 2027, 35 bids were received and destination securities worth ₹4,164.015 crore were issued against the full accepted amount of ₹4,000 crore. For 6.64% GS 2027, 9 bids were received, ₹503,899 crore was accepted, and destination securities worth ₹514,155 crore were issued. For 7.17% GS 2028, 25 bids were received, ₹155 crore was accepted, and destination securities worth ₹150,450 crore were issued, while for 7.06% GS 2028, 10 bids resulted in the full acceptance of ₹5,000 crore and destination securities worth ₹4,838.060 crore were issued.

The cut-off price and yield were 96.77 and 6.7091% for 6.19% GS 2034, 99.00 and 6.8145% for 6.67% GS 2035, 104.85 and 6.7097% for 7.50% GS 2034, and 105.16 and 7.0113% for 7.62% GS 2039, respectively.

Market Signals and Impact on Debt Management

In the second group, the notified amounts for 8.60% GS 2028, 7.37% GS 2028, 7.10% GS 2029, and 7.88% GS 2030 were ₹2,000 crore, ₹3,000 crore, ₹5,000 crore, and ₹4,000 crore, respectively. The destination securities for these were set as 7.50% GS 2034, 6.64% GS 2035, 6.64% GS 2035, and 7.10% GS 2034.

Despite receiving 15 bids for 8.60% GS 2028 and 5 bids for 7.37% GS 2028, no proposals were accepted, so no destination securities were issued in these two categories. In contrast, for 7.10% GS 2029, ₹839,305 crore was accepted from 12 bids and destination securities worth ₹867,977 crore were issued, while for 7.88% GS 2030, the full acceptance of ₹4,000 crore from 8 bids resulted in destination securities worth ₹4,081.409 crore being issued.

These results indicate that the RBI and the government are balancing the maturity profile by shifting short-term debt maturing soon into long-term securities. Categories with no accepted bids show limited alignment between pricing and investor demand, while segments with full acceptance reflect relatively strong market interest.

For the July 2026 redemption of two tranches of Sovereign Gold Bonds (SGB), the RBI had predetermined the redemption price and its calculation basis. Our earlier report stated that the redemption prices for SGB 2020-21 Series X and SGB 2021-22 Series IV will be based on the simple average of the closing price of 999 purity gold per gram as published by IBJA, providing investors with clarity on cash flow and settlement at maturity.

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