GOI Bonds purchase

[Prabhumr]

Followup question: Interest will be credited to the bank account even if we buy G-sec from Kite instead of Coin right?

[ShubhS9]

@Prabhumr

Followup question: Interest will be credited to the bank account even if we buy G-sec from Kite instead of Coin right?

Yes, interest will be credited to your bank account even if your buy bonds from Kite.

[curiousvi]

I have some confusion about primary market of GOI bonds
Here are my questions…
Hello, you seem to be knowledgeable about govt securities so if you dont mind can you clarify some confusion?

1. Where do we find upcoming primary non competitive auction for GOI securities? I mean calendar - Press release of RBI is the reliable way to find such auctions? i.e. RBI Retail Direct
2. Once I find the upcoming auctions …what are all the options for me to buy thru primary market …I mean rbidirect is one of them? idbi samridhhi ? nse gobid? anything else ? thru Zerodha coin we can participate in GOI primary auctions?
3. Dated securities are issued every week by default ? or its not fixed but whenever RBI decides?
4. What are the timing to participate in GOI dated securiteis (please note that I am asking about GOI dated bonds not treasury bills nor state government bonds.
5. Now for secondary market - what are the options to buy and sell ? same options I mentioned above ? anything else? @Akash_Shah @viswaram @cvs @TradeB2B

[cvs]

Per my understanding,

1. Yes.

2. Yes. RBI Retail Direct is the primary way.
   …and the other avenues you mentioned (eg. Zerodha Coin) as well.

3. Whenever RBI decides.

4. NSE, BSE (eg. Zerodha Kite).

[viswaram]

Issuance calendar for Government Bonds (G-Secs/GOI Dated Securities)

Here is the issuance calendar for Government of India Dated Securities. The bidding window will be opened each week here for you to invest in these bonds. S. No. Week of Auction Amount in (₹ Crore) Security-wise Allocation 1 October 02-06, 2023 30,000 i) 05 Years for ₹7,000 crore ii) 10 Years for ₹13,000 crore iii) 30 Years for ₹10,000 crore 2 October 09-13, 2023 34,000 i) 07 Years for ₹12,000 crore ii) 14 Years for ₹10,000 crore iii) 40 Years for ₹12,000 crore 3 …

check this link. The existing GOI bonds are open for bidding. When fresh bonds are issued i think it comes with “new issue” & then FRB floating rate dynamic interest

… zerodha >> coin >> Gsec also shows the items which are open for bids

[Akash_Shah]

1. Press release is good way to track. Or Zerodha coin also shows upcoming auction details

2. RBI retail direct is the option.

@curiousvi

thru Zerodha coin we can participate in GOI primary auctions?

Yes, you can participate through Coin too
https://coin.zerodha.com/dashboard/gsec/invest

However, remember the difference between RBI retail direct and all other platforms you mentioned including coin. When you bid through this, bonds will be allotted in reside in your demat account. Once allotted you can use it as margin or trade them through NSE/BSE.
When you buy through retail direct, they are issued as entry in RBI ledger (and not in demat). These cannot be used for margin nor can be traded on stock exchange.
So be clear what you are buying Gsec for, before deciding where to buy from.

@curiousvi

Dated securities are issued every week by default ? or its not fixed but whenever RBI decides?

Not every week. RBI do issue a tentative calendar for half year or so. But again this is not fixed and dates change.
Mostly it is not every week.
Also, just because there is an auction, does not mean bonds will get issued. Sometime RBI does not like the yield and cancels the auction or devolve it on primary dealers. So it is never fixed.

@curiousvi

What are the timing to participate in GOI dated securities (please note that I am asking about GOI dated bonds not treasury bills nor state government bonds.

Auction and settlement dates are decided by RBI. RBI puts it in the press release.
Generally all platform accepts bid till one day prior evening of actual auction date.

@curiousvi

Now for secondary market - what are the options to buy and sell ? same options I mentioned above ? anything else?

If you bought through RBI retail direct, you can only sell it through that. (as these securities are sitting on an RBI ledger not in your demat)
If you bought it through any broker of stock exchange platform, securities get allotted in your demat and you can trade it like any other securities. However, some Gsec might not have enough liquidity everyday and getting out might involve some difficulties.

[curiousvi]

@Akash_Shah

If you bought through RBI retail direct, you can only sell it through that. (as these securities are sitting on an RBI ledger not in your demat)

I did not know this until now…I thought since RBI direct is asking all your details including demat - it will be delivered to demat account…hmmm I guess that is why rbidirect last traded price and broker’s last traded price (for example Coin) has always a difference? LTP at broker is always higher than rbi direct?

For cash component portion for option selling, I think Gsec buying thru broker(higher price than rbidirect and brokerage of 6 paise ) is still justifiable compared liquid bees where you can get around 3% and same hair cut?

For example even if I buy 7.15% gsec …it will give higher interest than those liquidbees/liquidetf or iciciliq -

Am I missing something?

[viswaram]

@curiousvi

brokerage of 6 paise

only applicable if you buy through coin.

purchase via kite is brokerage free, other duty applies.

[curiousvi]

If we buy from idbi samridhi , nse gobid, bsedirect - will it be delivered to our demat and we can pledge those or its like rbidirect - just a ledger entry like rbidirect

Can someone explain 091TB190919 - I know its treasury bill 91 days but what are other numbers mean and what is interest rate and how do I find current yield ?

also can we pledge state govt bonds ? and treasury bills and get collateral margin from broker?

Also what does it mean when it says odd lot on ccindia.com website?
@Akash_Shah @viswaram @cvs

[viswaram]

i dont think t-bills can be pledged

Approved list of Securities at Zerodha.

list of items that can be pledged if you are using zerodha. every other broker will have a similar list

also i dont have experience with idbi & bse…

[Akash_Shah]

@curiousvi

Can someone explain 091TB190919 - I know its treasury bill 91 days but what are other numbers mean and what is interest rate and how do I find current yield ?

last number are date when this T-Bill mature i.e. 19 Sep 2019 (This one has already matured)
Generally when fresh T-Bill is issued, an indicative yield is available on coin (or from when you buy) after that tracking it requires some effort. But yes CCIL is good source to check for T Bill yields.

@curiousvi

Also what does it mean when it says odd lot on ccindia.com website?

This is how it is defined

[Akash_Shah]

@curiousvi

For cash component portion for option selling, I think Gsec buying thru broker(higher price than rbidirect and brokerage of 6 paise ) is still justifiable compared liquid bees where you can get around 3% and same hair cut?

For example even if I buy 7.15% gsec …it will give higher interest than those liquidbees/liquidetf or iciciliq -

Am I missing something?

you are just thinking from margin perspective. But there are other risks.
7.15% G-sec is long dated security whereas others are short term securities.

long dated security carries duration risk. If interest rate continues to rise (like it is happening currently) it will result in loss of capital. So unless you intend to hold Gsec for its entire duration, you need to consider these risks.

[curiousvi]

@Akash_Shah

However, remember the difference between RBI retail direct and all other platforms you mentioned including coin. When you bid through this, bonds will be allotted in reside in your demat account. Once allotted you can use it as margin or trade them through NSE/BSE.

Just want to confirm - if we buy Gsec thru idbi portal - it goes to our demat account and we can pledge them to get cash collateral margin correct?

[pankushri]

@TradeB2B can you confirm this?

[TradeB2B]

@curiousvi @pankushri yes its will go to your demate account only , and same you can pledge

[curiousvi]

@cvs

definite plus-points of buying GSECs on the secondary-market/exchange :

And you can pledge to get collateral margin

[ADITYA_DORA]

Hi,

Kindly guide me in understanding if the GOI bonds have any broker limit from Zerodha to pledge. If yes the document “list of securities that can be pledged” doesn’t mention if the limit is reached on Zerodha. Kindly share some light.

Thank you

[Gnome]

No boss. No limit. If it is there it will be mentioned.

[AdityaReddy]

I want to buy longterm gsec now, pledge those to avail margin…do the regular trading and tarde those gsecs when their prices go up…is there a way I can do that?

[smakkar]

Yes using Zerodha itself… E.g. Search for 699GS2051-GS, place a limit (or market) order and wait for it to get filled… Pledge them once in Demat, trade intraday or write options using that margin etc etc. And then wait for the interest rates to fall to book capital gains