Capital Markets and Flows

The Government of India, through the RBI, announced an auction to convert or switch securities amounting to an aggregate face value of ₹30,000 crore. The auction is scheduled for 15 June 2026 (Monday) with results to be announced on the same day and settlement on 16 June 2026 (Tuesday) on a T+1 basis.

The source securities and their respective face‑value amounts are:

  • 6.79% GS 2027 (maturing 15 May 2027) – ₹4,000 cr → Destination: 7.50% GS 2034 (maturing 10 Aug 2034)
  • 6.64% GS 2027 (maturing 09 Dec 2027) – ₹4,000 cr → Destination: 6.67% GS 2035 (maturing 15 Dec 2035)
  • 8.60% GS 2028 (maturing 02 Jun 2028) – ₹3,000 cr → Destination: 6.22% GS 2035 (maturing 16 Mar 2035)
  • 7.37% GS 2028 (maturing 23 Oct 2028) – ₹4,000 cr → Destination: 6.92% GS 2039 (maturing 18 Nov 2039)
  • 7.26% GS 2029 (maturing 14 Jan 2029) – ₹2,000 cr → Destination: 6.64% GS 2035 (maturing 16 Jun 2035)
  • 7.59% GS 2029 (maturing 20 Mar 2029) – ₹4,000 cr → Destination: 7.50% GS 2034 (maturing 10 Aug 2034)
  • 7.04% GS 2029 (maturing 03 Jun 2029) – ₹4,000 cr → Destination: 6.33% GS 2035 (maturing 05 May 2035)
  • 7.88% GS 2030 (maturing 19 Mar 2030) – ₹5,000 cr → Destination: 6.64% GS 2035 (maturing 16 Jun 2035)

The total face value of source securities equals ₹30,000 cr.

Bidding Procedure

Participants must place bids on the RBI’s Core Banking Solution (e‑Kuber) between 10:30 am and 11:30 am on 15 June 2026. Each bid must specify:

1. Amount of source security (face value) to be sold.

2. Price of the source security (up to two decimal places), which must equal the FBIL closing price of the source security on the previous working day.

3. Choice of destination security and the price (up to two decimal places) at which the participant is willing to buy it.

The minimum bid size is ₹10,000 and must be in multiples of ₹10,000. Participants may submit multiple bids, provided the aggregate does not exceed their holdings of the source securities.

Auction Mechanics

The auction is a multiple‑price auction. The cut‑off price is determined based on the price of the destination securities. Bids at or above the cut‑off are successful; lower bids are rejected. If multiple bids tie at the cut‑off, a pro‑rata allotment will be applied.

The switch ratio (price of source ÷ price of destination) is rounded to eight decimal places. The amount of destination security allotted is the product of the allotted source face value and the rounded‑off switch ratio, then rounded down to the nearest ₹10,000. Any odd amount (less than ₹10,000) is notionally allotted and bought back at the quoted clean price of the destination security.

Fund Settlement

Although the conversion is broadly cash‑neutral, settlement will involve net accrued interest (accrued interest on source FV minus accrued interest on destination FV) plus any cash consideration arising from rounding‑off of the destination face value. An illustration provided shows a destination price of ₹99.20, a switch ratio of 0.98286290, resulting in a pre‑rounding destination FV of ₹9,82,86,290.00, rounded down to ₹9,82,80,000.00, leaving an odd amount of ₹6,290.00. The cash consideration for this odd amount, calculated at the quoted clean price, is ₹6,240.00.

Settlement will be effected on a T+1 basis (16 June 2026).

Regulatory and Policy Measures

The Government of India reserves the right to accept offers for less than the notified amount, purchase marginally higher amounts due to rounding, or accept/reject any or all offers wholly or partially without assigning any reason. Operational guidelines for the switch transaction are detailed in the annex of the circular.

For technical issues, participants may contact the Core Banking Operations Team at ekuberhelpdesk@rbi.org.in (Phone: 022‑69870466 / 022‑69870415). For auction‑related difficulties, the IDMD auction team can be reached at auctionidmd@rbi.org.in (Phone: 022‑22702431 / 022‑22705125).

The auction framework reflects the Government’s ongoing debt‑management strategy, enabling the restructuring of existing securities into longer‑dated instruments while maintaining market liquidity.