Mumbai: Government's first issue of the 10-year inflation indexed bonds, which aims at discouraging gold investments, was Tuesday oversubscribed by more than four times, though only bids worth Rs 1,000 crore were accepted.
As per the RBI, which auctioned the '10 Years Inflation Indexed Government Stock, 2023', there were 167 competitive bids worth Rs 4,616 crore of which only 26 amounting to Rs 985.94 crore were accepted.
Also all the eight non-competitive bids by retail and mid-segment investors totalling Rs 14.06 crore were accepted, it said, adding the cut off-yield for the auction was fixed at 1.44 percent.
It was the first tranche of the Inflation Indexed Bonds (IIBs) which was designed to give an investment option to investors with a view to guarding their savings against inflation and dissuading them from buying gold. The IIBs will be issued on last Tuesday of every month.
The IIBs would form part of the government's borrowing programme for the first half of the current fiscal.
Last month, the government had announced plans to issue IIBs with 10 years maturity worth Rs 12,000-15,000 crore during the current fiscal.
While the first series of the bonds was open for all class of investors, the second series issue beginning October will be reserved exclusively for retail investors.
Both the government as well as the RBI are concerned over the rising gold imports which is putting pressure on Current Account Deficit (CAD). It had widened to historic high of 6.7 percent in third quarter of 2012-13.
First Published: Tuesday, June 04, 2013, 18:35