Post News Network
Bhubaneswar, Nov 25: Bonds of 5-year tenure issued by the state government received bids worth more than four times than the amount designated of Rs 1,000 crore on Tuesday with an attractive cut-off yield of 8.03 per cent, a Reserve Bank of India notification showed.
While the state government bonds received competitive bids worth Rs 4,025 crore, Rs 50.40 crore of non-competitive bids were received. As per the apex bank, while Rs 949.60 crore of competitive bids was accepted, all non-competitive bids were accepted.
Interestingly, the RBI notification showed that the state government would pay one of the lowest coupon rates to bond holders as compared with other state government bonds auctioned that day.
As part of the market borrowing plan, the state government would Rs 1,000 crore through sale of 5-year bonds, auction for which is scheduled on November 24, a Finance Department notification had earlier said.
“The proceeds of the loan would be utilized to finance capital outlay for creation of capital assets,” the department had said adding that consent of the central government has been obtained for floating these bonds.
During the current year’s budget, the state government has estimated to borrow Rs 7,356.38 crore as part of its market borrowing plan.