The government along with the Reserve Bank of India (RBI) announced two more tranches to the Sovereign Gold Bond (SGB) Series 2023–24 schedule for the fiscal year 2023-2024
Latest Sovereign Gold Bond (SGB) tranche issue price is the highest since launch in 2015
The SGB Series 2023-24 Series IV will open for subscription on February 12, 2024 and will close for subscriptions on February 16, 2024. The SGBs will be issued as Government of India Stock under Government Securities Act, 2006. Investors will be issued a Certificate of Holding for the same. The SGBs will be eligible for conversion into demat form
Where can you purchase these bonds?
The SGBs will be sold through Scheduled Commercial banks (except Small Finance Banks, Payment Banks and Regional Rural Banks), Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices, and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited.
Maximum limit
The maximum subscription amount every fiscal year (April–March), as announced from time to time by the government, is 4 kg for individuals, 4 kg for HUFs, and 20 kg for trusts and similar businesses. At the time of submitting an application for subscription, investors will be asked to provide a self-declaration. Note that SGBs subscribed under various tranches and those bought from the secondary market during the fiscal year will be included in the yearly ceiling.
How will issue price be calculated
According to RBI press release, “Price of SGB will be fixed in Indian Rupees on the basis of simple average of closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited (IBJA) for the last three working days of the week preceding the subscription period. The issue price of the SGBs will be less by Rs 50 per gram for the investors who subscribe online and pay through digital mode.”
Interest rate
The investors will be paid at a fixed rate of 2.50 percent per annum payable semi-annually on the nominal value.
SGB Series 2023-24 Series III
The SGB Series 2023-24 Series III was open for subscription on December 18, 2023 and closed on December 22, 2023. The issue price is set at Rs 6,199 (Rupees Six thousand one hundred and ninety nine only) per gram of gold.
Tenor
The tenor of the bond will be for a period of 8 years with an exit option from 5th year onwards to be exercised on the interest payment dates.
Redemption
The redemption price will be determined in Indian rupees and will depend on the simple average of the closing price of gold of 999 purity over the preceding three business days from the date of repayment, as reported by the India Bullion and Jewellers Association Limited.
