Government Plans ₹25,000 Crore Bonds Buyback on June 5

The Government of India will conduct a buyback of five government securities worth up to ₹25,000 crore through an auction on June 5, according to a notification released by the Reserve Bank of India (RBI) on May 30, 2025. The auction will be held between 10:30 AM and 11:30 AM, and settlement will take place the following day, on June 6, 2025.

Bonds Identified for Buyback by Government

The 5 securities identified for this buyback include:

• 7.27% GS 2026 (maturing April 8)
• 6.99% GS 2026 (maturing April 17)
• 6.97% GS 2026 (maturing September 6)
• 7.33% GS 2026 (maturing October 30)
• 8.24% GS 2027 (maturing February 15)

As per the RBI, there is no fixed amount allocated to each individual bond. The government reserves the right to determine the quantum of buyback for each security and may accept or reject any offer in full or part without providing a reason.

Read more: India's FY25 Gold Reserves Rise 7% to 879.58 Tonnes: RBI Report!

Outstanding Amounts of Bonds

According to RBI data, the total outstanding amounts for these securities are:

• ₹62,843.393 crore for 6.97% GS 2026
• ₹56,248.949 crore for 7.27% GS 2026
• ₹50,000 crore for 7.33% GS 2026
• ₹45,399.047 crore for 6.99% GS 2026
• ₹96,600.536 crore for 8.24% GS 2027

All the securities included in this buyback mature within the financial year 2026-27.

Bond Yields and Market Context

The announcement came shortly after bond markets saw a rise in yields. The 10-year benchmark yield climbed to 6.29%, up from 6.25% the previous day, after GDP data showed a 6.5% growth for FY25. This led to revised expectations on interest rate cuts, with traders now estimating a terminal policy rate of 5.50%-5.75%.

Conclusion

The buyback aims to reduce outstanding liabilities and manage upcoming redemptions, with all selected bonds maturing by FY27. Repurchasing its outstanding bonds from the market before their maturity date allows the government to decrease its liabilities and improve its fiscal standing.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.