GOI Bonds purchase

Bonds
22

Any allotment reports from zerodha or RBI ?
I have applied and was sucessfully alloted.
But do we get any reports??

23

Check your email, Zerodha sends itā€¦

1 Like
24

@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%

All of the above with details and examples are given in RBI Site Reserve Bank of India - Frequently Asked Questions

Do check it out!! Hope it helps!!

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25

Thanks a lot :blush::+1:

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26

You can use Heart button to show your feedback (Just telling you)

Any replies to any topics marks the topic as Latest & Unreadā€¦ I hope you understand.

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27

Sometimes the effort put in to reply in detail or share knowledge deserves more than just a simple Heartā€¦ Just like in this case your effort to share a best practice with me deserves this Thanks!! :wink:

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28

@Bhuvan can you please show the symbol in kite against this isin gsec

8.60% G.S. 2028 - IN0020140011 - need kite symbol to buy and need to know these particular gsec in secondary market , like interest payment

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29

it would be

  • 860GS2028-GS on NSE
  • 860GOI2028 on BSE

For more details, checkout this topic How to buy bond from secondary market - #3 by cvs

However, i am surprised that nothing comes-up in Kite-search
upon searching specifically for the NSE symbol of this above bondā€¦ :thinking:

I generally search for the ISIN in rbi.org.in to get the details of the bond likeā€¦

image
image1088Ɨ800 85.2 KB

[ Source ]

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30

@cvs thanks sir , nice explanation

31

For NSE, I think itā€™s 86GS2028-GS, in kite

32

@cvs @Bhuvan which gsec is highly liquidity yield above 8% , even if we buy how we can sell if there is no liquidity in nse

33

You get liquidity if you try to sell at face value. If you wish to sell at premium then liquidity is tough.

34

In the current state of affairs, none.
From what iā€™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.

2 Likes
35

If you are worried about liquidity, better option would be to use RBIā€™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.

image

Though, I would strongly second this point.

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36

Can you share the entire procedure for registering under the Retail direct platform.

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37

You can refer below article for details:

Or just google it. There are multiple articles giving step by step process

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38

I thought GOI is cash equivalent and Bharat Bond is not cash equivalent in collateral so there is quite a difference in pledging sense.

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39

@Akash_Shah @ShubhS9 If i purchae from rbi direct its will come on my demate account - then only we can pledge

40

No if you buy using RBI direct portal, bonds will not appear in your Demat. It is maintained in separate ledger of RBI.
I donā€™t think you can pledge bonds bought on RBI direct (not 100% sure but I think that is the case)

2 Likes
41

@Akash_Shah great sir , which goi sec is liquidity which is yielding abouve 8% can you give some idea sir to purchase from kite