Govt bond auction draws strong demand, cut-off yields at 6.96% and 7.37%

The government’s bond auction on Friday witnessed robust demand, with both the 6.68% GS 2040 and 6.90% GS 2065 issues drawing bids more than double their notified amounts. For the 6.68% GS 2040 paper, against a notified amount of Rs 16,000 crore, competitive bids worth Rs 28,598 crore were received. The cut-off price stood at 97.38, translating into a yield of 6.9646%. A total of 175 bids amounting to Rs 15,988 crore were accepted, with a partial allotment of 92.1% across three bids. The weighted average yield was marginally lower at 6.9491%. Meanwhile, the 6.90% GS 2065 bond also attracted heavy interest with bids worth Rs 39,607 crore against a notified amount of Rs 16,000 crore. The cut-off price was set at 93.87, corresponding to a yield of 7.3786%. Of the competitive bids, Rs 15,922 crore were accepted from 111 bidders, with an allotment ratio of 25% across eight bids. The weighted average yield stood at 7.3645%. Non-competitive bids worth Rs 11.8 crore in the 2040 paper and Rs 77.7 crore in the 2065 paper were fully accepted. There was no devolvement on primary dealers in either of the issues.