Government to Auction ₹32,000 Crore of 6.48% Bonds Maturing in 2035

New Delhi, Dec 2025 : The Government of India on Monday announced the sale (re-issue) of the “6.48 per cent Government Security 2035” for a notified amount of ₹32,000 crore through a price-based auction using the multiple price method. The auction will be conducted by the Reserve Bank of India (RBI) through its Mumbai Office on January 2, 2026, according to a statement issued by the Finance Ministry.

The government has also retained the option to accept additional subscriptions of up to ₹2,000 crore against the notified amount, depending on demand and market conditions. This flexibility allows the Centre to raise extra funds if investor response to the auction is strong.

As per the notification, up to five per cent of the notified amount will be reserved for eligible individuals and institutions under the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities. This provision enables retail investors and smaller institutions to participate in government bond auctions without having to compete directly with large institutional bidders, thereby broadening investor participation.

Both competitive and non-competitive bids must be submitted electronically through the RBI’s Core Banking Solution platform, known as the E-Kuber system, on the day of the auction. Non-competitive bids will be accepted between 10:30 a.m. and 11:00 a.m., while competitive bids can be placed between 10:30 a.m. and 11:30 a.m. on January 2, 2026.

The results of the auction will be announced later the same day, providing clarity to participants on allotments and pricing. Successful bidders will be required to make payment on January 5, 2026, the statement added.

The security will also be eligible for “When Issued” trading, in line with the Reserve Bank of India’s guidelines on When Issued transactions in Central Government Securities. These guidelines, originally issued on July 24, 2018, and amended from time to time, allow trading in securities before they are formally issued, helping improve market liquidity and price discovery.

Government securities, commonly referred to as government bonds, are issued to raise funds for public expenditure. The money mobilised through such auctions is used to finance infrastructure projects, social welfare schemes, and other developmental initiatives, as well as to bridge fiscal deficits. By borrowing from the market, the government is able to meet funding requirements without immediately increasing taxes.

These bonds are widely regarded as low-risk investment instruments, as they are backed by the sovereign guarantee of the Government of India. While government securities typically offer lower interest rates compared to corporate bonds, they remain attractive to investors seeking safety, stable returns, and long-term capital preservation.

Team Maverick.