The Reserve Bank of India did not accept any bids in an auction to buyback government bonds, results released on Thursday showed. According to reports from The Hindu BusinessLine, the buyback included bonds maturing this financial year, but investors offered bonds worth only ₹3,109.305 crore of the ₹30,000 crore that New Delhi sought to buy through the buyback. This development has drawn significant attention from various quarters, with experts and analysts closely monitoring the situation as it continues to unfold.
Traders cited ample banking liquidity as the reason for the tepid response. As reported by The Hindu BusinessLine, a treasury official at a private bank explained that "banks already have ample surplus and are looking for avenues to park these funds, and hence there was hardly any interest from them." A private bank trader added that bids were likely placed at prices higher than market levels. The auction included four government securities with varying yields, receiving bids across different maturities but ultimately resulting in zero accepted bids.
The auction received specific offers for four government securities with varying yields and maturities. ₹750,055 crore was offered for 7.33% GS 2026, ₹440,020 crore for 5.74% GS 2026, ₹818,950 crore for 8.15% GS 2026, and ₹1,100.280 crore for 8.24% GS 2027. These securities received 3, 3, 7, and 11 bids respectively, but the number of accepted bids in each category remained NIL. The result makes it clear that no securities were repurchased under the government's liability management plan at this stage, indicating that market prices or yields were unacceptable to the RBI.
