SGB Redemption Costs Govt Over Rs 7,500 Cr in FY24
Bonds issued in 2017 under 14 tranches are up for redemption this year after completing the tenure of eight years.;
Chennai: At the current gold rates, investors will receive around 200 per cent returns on the sovereign gold bonds that are up for redemption in 2025. Bonds of 8.41 tonnes of gold will come up for redemption this year, which can cost over Rs 7500 crore to the government at the current gold rate.
Bonds issued in 2017 under 14 tranches are up for redemption this year after completing the tenure of eight years. Bonds of 8.41 tonnes of gold will be redeemed this year, as per the data of World gold Council.
The issue price of these tranches was at an average Rs 2975 per gram, while the gold rate has already touched Rs 9000 per gram in 2025 – up by 200 per cent. Further, the bonds also carry an interest rate of 2.5 per cent, which are paid bi-annually. When calculated at the current rate of around Rs 9000 per gm, the redemption of 14 tranches could be a Rs 7569 crore liability for the government.
The government had issued 67 tranches of gold bonds between FY16 and FY24. Investors had purchased 146.96 tonnes of gold under the scheme. Of this, the last three issues between September 2023 and February 2024 saw the highest purchases. The last issue in February 2024 saw the highest purchase of 12.7 tonnes.
Six tranches issued in 2015 and 2016 have been redeemed till now. Further, some units have been either cancelled or redeemed prematurely. Bonds of 14.8 tonnes of gold have been redeemed till now and 132.15 tonnes are currently outstanding. end
