@smakkar - After you place the order in Zerodha Coin, RBI conducts the auction for the bond. It will be mostly price based auction. ie., weighted avg price (or) clean price of the bond will be determined through competitive / non-competitive bidding process. (Details of the process in RBI Site mentioned at end)
After this RBI publishes the full-auction results in its site as a press release. You can see the weighted avg price/ yield in that.
So, clean price of G-Sec is known from the auction results.
To calcualte the yield of G-Sec, you will need the following
A - Settlement Date of Security
B - Maturity Date of Security
C - Annual Coupon Rate
D - Price of the Bond
E - Redemption (or) Face Value of Bond. ie., Rs.100/- usually
F - Interest pay out Frequency ie., 2 if half-yearly interest payout / 4 if quarterly interest payout
Now, in Excel type this formula for getting the yield
=YIELD(A,B,C,D,E,F)
For Calculation of Accrued Interest of G-Sec, you will need
C - Annual Coupon Rate
D1 - Date of issue of bond. ie., when the bond is first issued
D2 - Trade Date -1
G - No. of days between D1 and D2
Accrued Interest per unit = C*(G/360)
Dirty price per unit = Clean price from auction results + Accrued Interest per unit
Apart from this brokerage is calculated @ Rs. 0.06/- per Rs. 100/- over which GST is calculated at 18%
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In the current state of affairs, none.
From what i’ve seen, liquid GSECs/SDLs (few lacs INR worth traded each day in NSE) are yielding around 7%.
eg. 610GS2031, 667GS2035, 667GS2050, 699GS2051, 68GS2060, 695GS2061.
Often not even that. Many times one needs to sell at a discount if in a hurry (i.e. need to sell within a day or 2).
Ideally, look to invest in GSEC/SDLs ONLY to hold them till maturity.
If you are worried about liquidity, better option would be to use RBI’s retail direct platform. RBI does provide some market making in it, so hopefully spread should be minimal.
Also, following is current rate of liquid Gsec trading, so you can get something in this range on Retail direct platform.
No if you buy using RBI direct portal, bonds will not appear in your Demat. It is maintained in separate ledger of RBI.
I don’t think you can pledge bonds bought on RBI direct (not 100% sure but I think that is the case)