So ive been investing in G-Secs for about 3 years now and only recently started paying close attention to the RBI’s issuance calendar, specifically the half yearly calendar they release before each H1 and H2. Honestly embarassed it took me this long.
For those who dont know, the RBI typically releases a borrowing calendar that tells you which weeks auctions are scheduled, roughly how much will be raised, and what maturities are on offer. The H1 FY2025 calendar had weekly auctions of around 30,000 to 35,000 crore in GOI dated securities.
My question to the group is do you actually trade around this calendar? Or do you just buy and hold regardless? Ive started timing some of my entries around auction weeks because yields tend to move a bit in anticipation. Would love to know if others are doing the same or if im overcomplicating this.
Great topic Laukik, this doesnt get discussed enough here honestly.
Yes i follow it closely. The calendar is released by RBI usually around end March for H1 (April to September) and end September for H2 (October to March). What most retail investors miss is that its not just a schedule, it signals the governments borrowing intent and how front loaded or back loaded the fiscal years borrowing will be.
So for example if the government front loads heavily in Q1 it usually means theyre expecting revenue shortfalls later or want to lock in rates before any upward pressure builds. That itself is a macro signal worth reading.
I dont trade around it aggressively but i do use it to decide when to increase allocation. If i see a cluster of long duration issuances coming up and the market is already a bit stressed on liquidity, i wait for yields to rise post auction before buying on the secondary market through Bondscanner.
Honestly im a pretty simple investor. i buy G-Secs for the safety and the fixed income. I dont time the market at all.
But the issuance calendar did help me in one specific way. I used to wonder why yields on the 10 year benchmark would suddenly move by 5 to 8 bps in a single day without any obvious news. Once i started tracking the auction calendar i realised it often coincides with large auction announcements or devolvement on primary dealers. Now i atleast understand why its happening even if i dont act on it.
For retirees like me, just knowing the calendar exists helps you not panic when yields move around auction weeks. Thats honestly been the biggest benefit for me.
Parth makes a good point about devolvement, let me add some context for the newer members here.
When the RBI conducts a G-Sec auction it sets a cutoff yield. If market participants bid at yields higher than what RBI is comfortable with, the RBI can reject those bids and the auction devolves onto Primary Dealers or PDs. PDs are then obligated to absorb the unsold portion.
Why does this matter for retail investors watching the calendar? Because heavy devolvement is a signal of weak demand at current yields. It often means yields will drift higher in the coming days as PDs offload inventory. Ive used this pattern a few times to buy on Bondscanner at slightly better yields a week or two after a badly recieved auction.
The calendar tells you when auctions are. Watching the auction results tells you how the market recieved them. Together theyre quite powerfull honestly.
this is really helpful, thank you everyone. i have a basic question, where exactly do i find this issuance calendar? is it on the RBI website? and does it get updated if plans change mid year?
yes the primary source is the RBI website rbi.org.in. Look under Government Securities Market or search for Indicative Calendar for Market Borrowings. Its usually a PDF.
Few things to know. First its indicative, not binding. The government can and does revise borrowing amounts mid year, especially if tax revenues surprise on the upside or downside. During COVID for example additional borrowing was announced mid year which caused a sharp yield spike.
Second the calendar shows planned issuances but doesnt always specify the exact securities upfront. Sometimes you only know a week ahead that a particular tenor, say 30 year or 5 year, will be on offer. RBI releases specific auction notifications usually 2 to 3 days before each auction.
I also track it through a few financial news aggregators which send alerts. Saves me from checking the RBI site every week manually.
Wanted to bring up something slightly different here. Switch auctions and OMOs (Open Market Operations) sit alongside the regular issuance calendar and honestly get ignored by most retail investors.
The government sometimes conducts switch auctions where it swaps short tenure bonds for longer ones to manage its redemption profile. This affects the supply of certain securities on the secondary market and can impact prices even if the gross borrowing number stays unchanged.
Similarly when RBI conducts OMOs, buying back G-Secs from the market, its effectively reducing supply and supporting prices. Watching whether OMOs are being announced alongside a heavy issuance calendar tells you alot about RBIs intent to manage yields.
In FY24 there were periods where the gross issuance looked quite heavy on paper but OMO support meant net supply was much lower. Yields stayed range bound as a result. Retail investors who only looked at the gross calender and stayed on the sidelines missed a decent window imo.
Excellent point on OMOs. Would also add that State Government bonds, SDLs or State Development Loans, have their own seperate issuance calendar that runs parallel and these often offer 25 to 40 bps higher yield than equivalent GOI securities for essentially the same soverein backed credit quality.
The SDL calendar is announced by RBI each week for the following Tuesday auction. Its less predictable than GOI dated securities but worth tracking if you want to pick up that extra yield. Ive been building a small SDL ladder alongside my GOI holdings for this exact reason.
Since were getting into the weeds and i think its worth it, let me mention the WMA or Ways and Means Advances connection that most retail investors never think about.
The government uses WMA, essentially a short term overdraft from RBI, when its cash flows are mismatched. When WMA usage is high it signals that tax collections are lagging and the government may need to accelerate market borrowings ahead of schedule. So even if the issuance calender says borrowing is evenly spread, high WMA usage mid quarter is a leading indicator that a revised or front loaded auction might be coming sooner than expected.
I check WMA data from RBIs weekly statistical supplement. Sounds nerdy but its given me a heads up twice in the last two years when borrowing picked up faster than the calendar suggested. Worth bookmarking that page.
Great discussion everyone. If i had to leave one takeaway for anyone reading this later it would be this. The issuance calendar is free, publicly available information that most retail bond investors completly ignore. Even spending 15 minutes a month reviewing it will put you ahead of the majority of retail participants. You dont need to be a treasury desk analyst, just knowing whats coming helps you make better entry decisions and stops you from being surprised by yield moves that the instituional market already saw coming.
Happy to keep this thread going if anyone has questions about specific upcoming auctions.