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Bhubaneswar: The state government has raised Rs 1,000 crore in the open market by selling government securities of five year tenure for creation of capital assets.
The stock was auctioned through the Mumbai office of the Reserve Bank of India.
The state government had notified sale of its stock of five-year tenure for Rs 1,000 crore November 24, 2015. The auction was completed the same day and the notified amount of Rs 1,000 crore was accepted at a cut off yield rate of 8.03 per cent, sources in the finance department said.
“As our capital investment exceeded our revenue generation, we raised `1,000 crore from the open market by selling our securities,” a senior official of the finance department said.
“The proceeds of the loan will be utilised to finance capital outlay for creation of capital assets. The consent of the central government has been obtained for the floatation of the loan as required by Article 293 (3) of the Constitution of India,” said a notification of the finance department.
Government stock up to
10 per cent of the notified amount of the sale will be allotted to eligible individuals and institutions subject to a maximum limit of 1 per cent of the notified amount for a single bid according to the revised scheme for non-competitive bidding facility in the auction of the state government securities, the notification stated.
The tenure of the stock commenced November 26, 2015, while the loan will be repaid at par November 26, 2020. Interest will be paid May 26 and November 26 every year till the end of tenure, sources said.
It will be considered an eligible investment in government securities by banks for the purpose of statutory liquidity ratio under Section 24 of the Banking Regulation Act, 1949.
