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Our Bureau

Mumbai , July 21

The Government of India has announced the sale (re-issue) of the "7.55-per cent Government stock 2010" for a notified amount of Rs 4,000 crore through price based auction using multiple price auction method. The auction will be held on July 27.

Bond prices have been on the rise in the past few days in anticipation of the postponement of the auction, which was to be held between July 17 and 25. Dealers said in the event of RBI hiking rates during the quarterly review of the credit policy on July 25, a deferred auction would help minimise losses.

Additionally, the size of the auction has been reduced. A press release from RBI said: "It may be recalled that as per the indicative calendar for issuance of marketable dated securities, the Government of India was to auction a 15-19 year security for a notified amount of Rs 5,000 crore during July 17-25. Taking into account all relevant factors, Government of India, in consultation with the Reserve Bank of India, have decided to auction a security of four years tenure for Rs 4,000 crore on July 27."

With this reduction in notified amount, the additional amount of Rs 4,000 crore raised in the auction held on June 22 stands fully adjusted, added the release.

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