Sovereign Gold Bond: NSE gets bids worth Rs 106 crore

New Delhi: Leading bourse National Stock Exchange (NSE) Monday said it has received about 341 kg worth of subscription bids valuing over Rs 106 crore for the fourth tranche of the sovereign gold bond scheme.

Bids for the bonds issued by RBI on behalf of the central government were received during the 5-day window that ended on July 22.

"An initial estimate shows that the total collection stands at 341.6 kg and is worth Rs 106.5 crore. The numbers are subject to verification by RBI and other authorities," NSE said in a statement.

Earlier, the central bank appointed NSE the 'Receiving Office' for collecting subscription bids from investors. The exchange has received some 8,000 applications.

It organised nearly 100 programmes across India last one month to popularise the product.

The first three tranches had attracted an investment of Rs 1,318 crore, equivalent to 4.9 tonnes of gold, at prices prevailing at those times.

SGB -- the government securities denominated in grams of gold -- offers an alternative to keeping gold in physical form. The scheme was announced by the government on October 30, 2015.

The scheme offers an interest of 2.75 percent per annum, payable every six months on initial investment minus the risk of theft/loss or impurities associated with physical gold.

The bond can be converted into demat form and used as collateral for availing loans. It will be repayable after eight years from the date of issue and premature redemption is permitted after 5th, 6th and 7th years from the date of issuance.

Funds raised through the bonds will form part of the government's market borrowing programme.

Redemption of sovereign gold bonds by an individual is exempt from capital gains tax. It also provides that long-term capital gains accruing to any person on transfer of sovereign gold bonds shall be eligible for indexation benefits.

India imports about 1,000 tonnes of gold every year, which is the second-biggest constituent of the import bill after crude oil.

Gold imports showed a decline of about 8 percent to $31.72 billion in 2015-16 due to weak global prices and are expected to keep a lid on the country's current account deficit. The print read USD 34.38 billion in 2014-15.