RBI Sets ACU Commission Cuts for ₹32,000 Crore G-Sec Auction
Key points
- The RBI has set Additional Competitive Underwriting commission cut-offs for four government securities totalling ₹32,000 crore, with Primary Dealers accepting full notified amounts.
- Cut-offs ranged from 0.38 paise per ₹100 for the 2033 bond to 0.99 paise per ₹100 for the 2056 Sovereign Green Bond.
- Each tranche split evenly between Minimum Underwriting Commitment and competitive ACU, suggesting balanced dealer demand.
- The Green Bond cleared at nearly triple the rate of the 2033 conventional issue, pointing to duration anxiety or a scarcity premium on the SGrB label.
- The auction follows on 19 June, a compressed timeline leaving little room to reprice before settlement.
The Reserve Bank of India has set cut-off rates for Additional Competitive Underwriting commission on four government securities totalling ₹32,000 crore, with Primary Dealers accepting the full notified amounts across all tranches. Cut-offs ranged from 0.38 paise per ₹100 for the 2033 bond to 0.99 paise per ₹100 for the 2056 Sovereign Green Bond, whilst the 2029 and 2055 securities cleared at 0.50 and 0.59 paise respectively. Each tranche split evenly between Minimum Underwriting Commitment and competitive ACU, suggesting balanced demand across the dealer consortium.
The auction itself follows immediately on 19 June, a compressed timeline that leaves little room to reprice ahead of settlement. The Green Bond clearing nearly triple the rate of the 2033 conventional issue suggests either duration anxiety or a scarcity premium on the SGrB label, even as the notional amounts match. The question for secondary spread behaviour is whether the ACU differential persists post-auction or compresses once the paper is in the market.