Government of India to hold an underwriting auction on October 16 for the reissue of ₹34,000 crore in government securities

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Highlights

The Government of India will conduct an underwriting auction on October 16 for the reissue of ₹34,000 crore of the 6.94% GS 2036 government security.
The minimum underwriting and bidding commitment for each primary dealer has been set at ₹810 crore, pre-structuring bidding support.
The underwriting commission will be automatically credited to primary dealers' current accounts with the RBI on the issue date, ensuring operational clarity and market stability.

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

Auction framework and bidding process

According to an RBI press release, the notified amount for the 6.94% GS 2036 security is set at ₹34,000 crore, while the minimum underwriting commitment for each primary dealer is ₹810 crore, with the minimum bidding commitment under the additional competitive underwriting auction also set at ₹810 crore. This arrangement applies under the existing underwriting framework notified on November 14, 2007.

The underwriting auction will be conducted on Friday, October 16, 2026, using a multiple-price method. Primary dealers may submit their ACU bids electronically via the Reserve Bank of India's core banking solution, the e-Kuber system, from 9:00 am to 9:30 am on the same day.

Market operations and impact on participants

The underwriting arrangement for this issuance ensures the participation of primary dealers for the smooth execution of the government borrowing programme. The specified commitments indicate that bidding support is being pre-structured for the large-scale reissue, helping maintain stability in demand management and issue execution.

The underwriting commission will be credited on the date of issue to the current accounts of the respective primary dealers with the RBI. This payment arrangement provides operational clarity for dealers and ensures the regular implementation of the prescribed underwriting mechanism in the government securities market.

Our previous report assessed a sharp increase in states' market borrowing for Q3 FY2027, estimating gross SGS issuance at ₹3.6 lakh crore and net issuance, after redemption adjustments, at ₹2.3 lakh crore, according to the RBI's auction calendar. The article also highlighted that a large share of the additional borrowing came from Maharashtra, West Bengal, and Haryana, while several states/Union Territories adopted a Benchmark Issuance Strategy (BIS) to make issuance more structured.

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