Ask us anything about investing in government bonds, treasury bills (t-bills) and state development bonds (SDLs)

[Aoz]

@Mayurika_Zaveri

How can someone buy Government Securities via Secondary market ? Does broker(Zerodha) provides that facility if so, what are the steps to do that ?

Yes, you can search/add the G-sec in the Kite Marketwatch and buy. The execution depends on the liquidity of the G-secs.

Read more: Government Securities – Varsity by Zerodha

[jayadev_muduli]

You mean the extra amount will be credited back to my account? If yes,when and how can i see that extra amount credited back?

[Gnome]

@jayadev_muduli

when and how can i see that extra amount credited back?

After the price discovery at the auction, bond is allotted. Then if there is surplus of funds it will be credited back to your trading account. You can see it in ledger statement. The statement will read “Difference in Government securities purchase price reversed.”

[jayadev_muduli]

Got it .Thanks

[Ram_J]

I want to buy state guaranteed loans in coin/zerodha such as ANDHRA PRADESH CAPITAL REGION DEVELOPMENT AUTHORITY / U.P. POWER CORPORATION LIMITED. How do i do this via Zerodha?

Please help

[ShubhS9]

@Ram_J

I want to buy state guaranteed loans in coin/zerodha such as ANDHRA PRADESH CAPITAL REGION DEVELOPMENT AUTHORITY / U.P. POWER CORPORATION LIMITED. How do i do this via Zerodha?

Please help

Issue of State Development Loans (SDL) opens for subscription on Coin on Monday’s. You can invest on Coin here. You can check the upcoming issues here: Issuance calendar for State Development Loans (SDLs)

[NewUser123]

Or you can try GoldenPi too… maybe use it to find better APYs for safe bonds too

[SAURABH_BHASIN]

Hello Bhuvan, I have a very naive clarification on this issuance of G-Sec.

How much difference (monetary) will it make between

Scenario A) Bidding for specific G-Sec, getting funds blocked, wait for issuance confirmation, reflection in DMAT a/c, re-credit of additional money blocked at coin for allocation, wait for G-Sec to get listed in pledge listing, use G-Sec to eventually pledge to get cash component benefit.

Scenario B) Wait for the G-Sec to get listed, buy this from secondary market (purchase like normal security) & get it in your DMAT account, pledge immediately on the allocation against transaction.
PS: Assuming that there is no major liquidity issue as such & these listed G-Sec can be bought in secondary market with minor slippages.

Could you please advise the difference between 2 scenarios from Purchase & Transaction cost implications.
It would be helpful if you can take specific example of recently listed G-Sec e.g 699GS2026-GS (6.99% G.S. 2026 issued on 17-Apr-2023)

Thanks

[Bhuvan]

@SAURABH_BHASIN

Scenario B) Wait for the G-Sec to get listed, buy this from secondary market (purchase like normal security) & get it in your DMAT account, pledge immediately on the allocation against transaction.
PS: Assuming that there is no major liquidity issue as such & these listed G-Sec can be bought in secondary market with minor slippages.

There’s very little volume in G-Secs on the exchange.

[cvs]

@SAURABH_BHASIN

Assuming that there is no major liquidity issue as such
& these listed G-Sec can be bought in secondary market with minor slippages

This is rarely true for most fresh issued GSECs.

@SAURABH_BHASIN

It would be helpful if you can take specific example of recently listed G-Sec e.g 699GS2026-GS (6.99% G.S. 2026 issued on 17-Apr-2023)

For example, let us look at its daily traded volumes on the secondary market.
Not at all traded of most days. And even when traded, trending down to only a few thousands.

However, there appears to have been some significant trade volume
in the secondary markets for a couple of days after the GSEC was listed.

(However, there’s nothing to indicate / guarantee that
even such a nominal trading-volume for few days will exist on secondary-markets
for every GSEC that gets listed.)

[Prabhumr]

@Bhuvan ++ Where can we check the Interest payment dates of SDL? As per the support article the interest schedule is published by the RBI, but can’t see anything about the Interest charges.

[cvs]

One can check the date of maturity of an SDL (or GSEC)
either on an exchange (BSE, NSE) it is listed in
or in any RBI or respective exchange circulars.

Interest payment on teh GSEC or SDL happens twice a year.

• Once of the same day each year as the date of maturity of the bond
• and another 6 months away from it.

i.e. half the coupon-rate of the bond is paid-out twice a year, until maturity of the bond.

[Bhuvan]

@Prabhumr

++ Where can we check the Interest payment dates of SDL? As per the support article the interest schedule is published by the RBI, but can’t see anything about the Interest charges.

RBI publishes the dates for G-Secs but not for SDLs, I’m not sure why. I’m trying to find a list of all dates, so far I’ve been unable to. We’ll post them here once we compile them
https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=55718

[Yogesh_Yadav]

I want to buy government securities and pledge them for margin, but when we go to coin only selected government securities are available. Q.Suppose I want to buy (9.15% G.S. 2024 IN0020110048), how can I buy particular securities in Zerodha? Q. In Zerodha approved list there are multiple securities that we can buy and pledge but when we go to coin only 2-3 securities are available. So let me know how can i buy other dated government securities.

[vikramaditya]

You can buy them in kite

Ask us anything about investing in government bonds, treasury bills (t-bills) and state development bonds (SDLs)

Yes, you can search/add the G-sec in the Kite Marketwatch and buy. The execution depends on the liquidity of the G-secs. [image] Read more: Government Securities – Varsity by Zerodha

[nithin_kumrr]

Hi Yogesh, you can invest in the GS (Government Securities) mentioned above through Kite. Simply search for 915GS2024-GS and place an order, just like buying stocks on Kite.

You can learn more about G-Sec’s here: Government Securities – Varsity by Zerodha

[Dheeraj_Jhunjhunwala]

How can one choose a bond if its rated highly say AA or AAA but unsecured vs. comparatively low rated bond but secured.

[CN_ib]

I have a question
Can someone explain the pricing of Gsec Like currently if I place an order for 741GS2036 via Coin the margin required is 11,132 for 100Q i.e., 111.32 each however the same is available at NSE for 106.65 each.

[Bhuvan]

@Dheeraj_Jhunjhunwala

How can one choose a bond if its rated highly say AA or AAA but unsecured vs. comparatively low rated bond but secured.

Ultimately, everything depends on the fundamental soundness of the company. Saying AA secured is better than AAA unsecured isn’t right. You have to make a case by case judgement.

[Bhuvan]

@CN_ib

Can someone explain the pricing of Gsec Like currently if I place an order for 741GS2036 via Coin the margin required is 11,132 for 100Q

The exchanges block an extra amount because the allotment price will be discovered in an RBI auction. The final allotment price will be around the indicative yield (price). The difference will be refunded back to you.

Basics of Government bonds

The yields on Govt bonds have risen substantially this year and there’s a lot of interest from investors. But we also get a lot of questions from investors about how Govt bonds work. Let’s understand the basics in this topic. The Govt needs money to finance various activities such as health, infrastructure, defence & other obligations. So, the Reserve Bank of India (RBI) issues bonds on behalf of the central and state governments to raise money to fund these activities. How are Govt securit…

@CN_ib

111.32 each however the same is available at NSE for 106.65 each.

G-Secs are not traded enough and are illiquid. So the prices you see on Kite can be very off. So please verify the prices with the prices on NDS-OM :: RBI NDS-OM - Central Govt. Mkt. Watch ::