RBI kicks off inflation bond sale; first tranche sold - Hindustan Times
close_game
close_game

RBI kicks off inflation bond sale; first tranche sold

Hindustan Times | ByHT Correspondent/Agencies, Mumbai
Jun 04, 2013 10:01 PM IST

India’s first sale of inflation-linked bonds in over a decade was fully sold today after attracting good demand, marking a promising start to the government’s attempt to wean millions of Indians off gold as a hedge against rising prices.

India’s first sale of inflation-linked bonds in over a decade was fully sold on Tuesday after attracting good demand, marking a promising start to the government’s attempt to wean millions of Indians off gold as a hedge against rising prices.

HT Image
HT Image

The Reserve Bank of India sold Rs 1,000 crore worth of 10-year bonds at a real yield of 1.44% over the wholesale price index. The RBI sold the debt on behalf of the government. The RBI received 167 bids worth Rs 4,616 crore, with a strong bid-to-cover ratio of over 4.5, which is a gauge of demand.

Hindustan Times - your fastest source for breaking news! Read now.

Dealers said the bulk of the demand likely came from traders and insurance firms, with foreign investors and mutual funds likely having declined to bid.

“The auction went well, looking at the cutoff levels. The size of the issue was small and a few investors may have picked it up. It’s, however, too early to comment how this product pans out,” said Harish Agarwal, a dealer with First Rand Bank in Mumbai.

He said that the bond was trading at a 0.25-0.30 rupee premium in the secondary market after being sold. Tuesday’s sale marks the first tranche of up to Rs 15000 crore of inflation-linked paper, which will be offered at monthly intervals during the current fiscal year.

Unlock a world of Benefits with HT! From insightful newsletters to real-time news alerts and a personalized news feed – it's all here, just a click away!- Login Now!
Stay informed on Business News along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs
SHARE THIS ARTICLE ON
Share this article
SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Thursday, March 28, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On