First-ever State Loan Auction: Punjab to Raise Rs.60 Crore (January 7, 1999)

The Government of Punjab has announced the sale of 10-year stock to the public by auction

for an aggregate amount of Rs.60 crore. The auction will be conducted by the Reserve bank of India at its Chandigarh Office on January 13, 1999. The auction is the first of its kind for the State Governments as they have so far been raising their market borrowing through conventional floatations with pre-announced coupon rates. At the meeting of the Finance Secretaries of State Governments held in Mumbai by the Reserve Bank of India on November 8, 1997 State Governments were offered a facility to raise 5 to 35 per cent of their market borrowing allocation in a flexible manner as regards timing, maturity and rate of interest. Accordingly, Government of Punjab has decided to raise Rs.60 crore during the year 1998-99 by availing of the facility.

Punjab Raises Rs.60 crore at 12.47 per cent (January 13, 1999)

Punjab Government today raised Rs.60 crore from the market. The ten-year paper was

auctioned at 12.47 per cent per annum. The weighted average yield at this cut-off was 12.39 per cent indicating the actual cost of borrowing to the State Government. As against the notified amount of Rs.60 crore, 29 bids were received in the auction for an aggregate amount of Rs.195 crore. Ten bids upto the yield of 12.47 per cent per annum for an aggregate face value of Rs.60 crore were accepted, of which one bid was partially allotted. The auction was conducted by the Reserve Bank of India at its Chandigarh Office.