Government to Auction ₹34,000 Crore of New 2036 Dated Securities on May 8
Why it matters
The Government of India is launching a new dated security, 'New GS 2036,' aiming to raise ₹34,000 crore. The auction, managed by the Reserve Bank of India (RBI) through its Mumbai office, allows for an additional ₹2,000 crore subscription under a greenshoe provision. This issuance is set for May 8, 2026, with settlement following on May 11.
The RBI will use the multiple price-based auction method, where successful bidders pay the specific yield or price they quoted. This differs from uniform price auctions where all successful bidders pay a single cut-off rate. New securities follow yield-based bidding, while re-issuances are price-based. Non-competitive bidding is available for up to 5% of the notified amount, facilitating participation from smaller investors through the Retail Direct portal.
- Trading Window: 'When Issued' trading is permitted from May 5 to May 8, 2026.
- Bidding Timing: Non-competitive bids close at 11:00 AM, while competitive bids extend to 11:30 AM on the auction day.
- Primary Dealers: PDs have a specific window (09:00 AM to 09:30 AM) to submit underwriting bids for the Additional Competitive Underwriting (ACU) portion.
Glossary
Multiple Price Auction: A format where each successful bidder pays the price or yield they specifically bid, rather than a single market-clearing price.
When Issued (WI) Trading: A market for a security that has been authorized but not yet issued, allowing price discovery before the actual auction.
NaukriSync Exam Angle
Indian Economy and Finance. Crucial technicality: RBI employs yield-based auctions for new securities and price-based auctions for re-issued ones. The 5% cap on the non-competitive segment for individuals and the T+1 settlement cycle (Auction on Friday, Settlement on Monday) are frequent focal points for banking and civil service examinations.