The Government of Chhattisgarh on 1st August 2024, notified the reissue of 6.94% Chhattisgarh State Development Loan (SDL) 2029 bonds, initially issued on March 24, 2021. This update is crucial for investors, financial institutions, and anyone interested in state government securities.
New Update
The Government of Chhattisgarh is reissuing SDL 2029 for an aggregate amount of ₹500 crore. This reissue is part of the state’s ongoing effort to finance various development schemes. The terms of this reissue are outlined in the latest specific notification, alongside the general terms from a previous notification issued in March 2019.
Purpose of the Loan
The funds from this reissue will support development schemes within the state. Importantly, the Central Government has already given its consent for this loan issuance, adhering to the constitutional requirements.
Procedure For Issuance
The Government Stock will be sold through an auction conducted by the Reserve Bank of India (RBI) at its Mumbai Office. The auction will take place on August 6, 2024, and will be executed via the RBI Core Banking Solution (E-Kuber) system. The coupon rate will be determined by RBI, and the auction will use a multiple price format.
Non-competitive Bidding
For those interested in participating in non-competitive bidding, up to 10% of the total issuance amount will be allocated to eligible individuals and institutions. However, there is a cap of 1% of the total issuance amount for a single bid. This offers an opportunity for smaller investors to participate in the auction.
Auction Details: Date- August 6th, 2024
Submission Times: Competitive bids: 10:30 A.M. – 11:30 A.M.
Non-competitive bids: 10:30 A.M. – 11:00 A.M.
Result Announcement: The auction results will be available on the RBI website.
Payment Instructions
Successful bidders are required to make payments on August 7, 2024, using various methods such as cash, banker’s cheque, demand draft, or a cheque drawn on their account with RBI, Mumbai/Nagpur.
Key Details of the Stock
Tenure: 8 years from March 24, 2021
Repayment Date: March 24, 2029
Interest Rate: 6.94% per annum, paid half-yearly on September 24 and March 24
Eligibility: The SDL qualifies as an eligible investment for banks under the Statutory Liquidity Ratio (SLR) and is eligible for the ready forward facility.
Why It Matters
This reissue is significant for both institutional and individual investors interested in state government securities. The SDL offers a fixed return with a relatively long tenure, making it an attractive option for those looking for stable investment opportunities. Additionally, the reissue supports Chhattisgarh’s development initiatives, contributing to the state’s growth and infrastructure.
