Latest: the full results, released after the cut-off announcement, show competitive bids of 33,343.800 crore rupees for the 2031 line, 1.75 times the amount notified, and 29,157 crore for the 2066 line, 2.08 times notified. Weighted average yields came in below the cut-offs, at 7.3437 percent on the 2031 and 7.9211 percent on the 2066, so most accepted paper priced inside the tail.
India’s dated auction cleared in full on Friday. The Reserve Bank of India accepted 19,000 crore rupees of the 6.53 percent government stock 2031 at a cut-off price of 96.65, an implicit yield of 7.3589 percent, and 14,000 crore of the 7.71 percent government stock 2066 at a cut-off price of 97.30, an implicit yield of 7.9339 percent. The amounts accepted matched the amounts notified on both lines, and devolvement on primary dealers was nil on both.
The underwriting auction held the same morning completed the backstop without strain. Total underwriting reached the full 19,000 crore on the 2031 and 14,000 crore on the 2066, split between minimum underwriting commitments of 9,513 crore and 7,014 crore and additional competitive underwriting accepted of 9,487 crore and 6,986 crore. The cut-off commission was 0.69 paise per 100 rupees on the 2031 and 0.94 paise on the 2066, the higher price on the forty-year line reflecting the duration dealers were being paid to stand behind.
The result matters because of the week that preceded it. On Wednesday the Reserve Bank rejected every bid at the treasury bill auction, and on Thursday bids for overnight repo money reached more than three times the amount on offer. Friday’s sale shows the squeeze is about the distribution of cash across banks and maturities, not an absence of demand for government paper at the offered yields: five-year money cleared at 7.3589 percent and forty-year money at 7.9339 percent, a spread of about 58 basis points between the two cut-offs.