Odisha to raise Rs 1,000 cr through securities sale

The state government has notified the sale of government securities of five year tenure, a move that is expected to fetch Rs 1,000 crore.

The sale of government stock will be subject to terms and conditions spelt out in a specific notification issued by the state finance department.

"The proceeds of the loan will be utilised to finance capital outlay for creation of capital assets. The consent of the central government has been obtained to the floatation of the loan as required by Article 293 (3) of the Constitution of India", the notification stated.

According to the notification, government stock up to 10 per cent of the notified amount of the sale will be allotted to eligible individuals and institutions subject to a maximum limit of one per cent of the notified amount for a single bid as per the revised scheme for non-competitive bidding facility in the auctions of the state government securities.

The government stock will be sold by auction through the Mumbai office of Reserve Bank of India (RBI).

The auction is scheduled to be conducted by the RBI today. The payment by successful bidders will be on March 11, 2015. Auction will be done at a coupon rate to be determined by the RBI at the yield based auction under multiple price formats.

The stock will be of five year tenure with the tenure commencing on March 11, 2015. The loan will be repaid at par on March 11, 2020.

The cut-off yield determined at the auction will be the coupon rate per cent per annum on the stock sold at the auction.

The investment will be reckoned as an eligible investment in government securities by banks for the purpose of Statutory Liquidity Ratio (SLR) under Section 24 of the Banking Regulation Act, 1949.