Govt to raise Rs 36,000 crore through two securities maturing in 2028 and 2035

MUMBAI: The Union government has announced the sale (re-issue) of two dated securities to raise a total of Rs 36,000 crore through an auction which will be conducted by the Reserve Bank of India (RBI) on July 25, 2025.

The first security to raise Rs 6,000 crore, is the 5.91 per cent Government Security (GS) 2028, which will mature on June 30, 2028. The second is the 6.33 per cent GS 2035, maturing on May 5, 2035, for which the notified amount is Rs 30,000 crore.

In addition to the notified amount, the government has also kept the option open to retain an extra subscription of up to Rs 2,000 crore for each of these securities, depending on the response from investors. The RBI, in a notification, stated, “Government of India (GoI) has announced the sale (re-issue) of two dated securities for a notified amount of Rs 36,000 crore”.

The government issues bonds to borrow money from the public, banks, and other institutions to meet its financial needs. When the government spends more than it earns through taxes and other revenues, it faces a fiscal deficit. To cover this gap, it issues bonds (also called government securities). Investors buy these bonds and, in return, the government promises to pay back the amount with interest after a fixed period.

This method helps the government raise funds for infrastructure, welfare schemes, salaries, subsidies, and other development programs without immediately raising taxes. Bonds are considered safe investments because they are backed by the government.

The current auction by RBI will be conducted using the multiple price method at the RBI’s Mumbai office via its electronic platform, e-Kuber. The results of the auction will be announced on the same day. All successful bidders will have to make payments on July 28, 2025. Primary dealers can submit their bids for underwriting the Additional Competitive Underwriting (ACU) portion from 9 am to 9.30 am on the day of the auction.

The RBI also stated that the minimum bid size for the securities is Rs 10,000 and in multiples of Rs 10,000 thereafter. These securities will also be eligible for “When Issued” trading from July 22 to July 25, 2025. This allows trading of the securities before they are officially issued.

Investors can also participate through the non-competitive bidding facility, including via the RBI Retail Direct platform. These securities will be eligible for repurchase transactions (repo) and are open for investment by non-resident investors under the Fully Accessible Route (FAR) as per RBI guidelines. The funds raised through this auction will support the government’s expenditure and borrowing requirements. (ANI)