Govt to conduct ₹25K cr bond switch auction on Monday to ease redemptions

The government will conduct a ₹25,000-crore switch auction on Monday to convert bonds maturing in 2026-27 into longer-tenor securities, helping smoothen its redemption profile and reduce rollover risk

The Government of India plans to conduct a ₹25,000-crore switch auction of dated securities to smoothen its redemption profile and ease near-term repayment pressures, the Reserve Bank of India (RBI) said in a release on Wednesday.

 

The auction, scheduled for Monday, seeks to convert a basket of government bonds maturing in 2026 and 2027 into longer-tenor papers ranging from 2032 to 2062.

 

The securities proposed to be switched include the 5.63% GS 2026, 7.33% GS 2026, 8.15% GS 2026 and 8.24% GS 2027. These will be exchanged for papers such as 8.32% GS 2032, 6.57% GS 2033, 7.50% GS 2034, 6.92% GS 2039 and the ultra-long 7.40% GS 2062.

 

The operation will follow a multiple-price format, under which successful bidders will receive allotment at their quoted prices.

 

Switch operations allow the government to exchange short-dated securities for longer-tenor bonds without immediate cash outgo, thereby distributing redemption obligations over time and reducing rollover risks.

 

Earlier, the Government of India had conducted a conversion/switch operation with the RBI to smoothen its liability profile. Under that exercise, the government bought back securities maturing in FY27 from the RBI and issued a longer-dated security of equivalent market value, based on Financial Benchmarks India Pvt Ltd (FBIL) prices.