How to bid in an RBI primary bond auction via Zerodha
This guide explains how retail investors can participate in the Reserve Bank of India’s primary bond auctions for Government Securities (G-Secs) and Treasury Bills (T-Bills). Primary auction participation allows investors to receive freshly issued government securities at the price determined by the institutional market, without any secondary market premium or broker markup on the price.
There are two routes for retail investors:
- Zerodha Kite: Non-competitive bid submission via NSE’s scheme, aggregated by Zerodha. Requires only an existing Zerodha account.
- RBI Retail Direct portal (rbiretaildirect.org.in): Direct non-competitive bid submission without a broker. Requires a separate Retail Direct Gilt Account (RDGA) at RBI. Zero brokerage; direct settlement into the SGL-linked demat.
This guide covers both routes, with the Kite procedure detailed more extensively given the Zerodha context. The encyclopedic overview of G-Secs on Zerodha and T-Bills on Zerodha provides background on the instruments themselves. The secondary market alternative is covered in How to buy a G-Sec on Zerodha Kite and How to buy a T-Bill on Zerodha.
Background: how the RBI primary auction works
The Reserve Bank of India conducts weekly auctions for T-Bills and periodic auctions for dated G-Secs (typically on Fridays, with some special auctions on other days). The auction mechanism is a multiple-price, sealed-bid competitive auction for institutional participants and a non-competitive window reserved for retail and small investors.
Competitive bids are submitted by primary dealers, banks, and institutional investors, who specify both price (or yield) and quantity. These bids determine the cut-off yield for the auction.
Non-competitive bids are submitted by retail investors, who specify only the quantity (face value amount). The price is not specified; instead, non-competitive bidders receive allotment at the weighted average price (or yield) of the competitive portion of the auction. This means retail investors receive the institutional market rate for newly issued G-Secs and T-Bills without having to participate in the price discovery process.
The 5% (of the notified amount) reserved for non-competitive bids is under the RBI’s Scheme for Non-Competitive Bidding Facility. If aggregate non-competitive bids exceed 5% of the notified amount, pro-rata allotment is made; if aggregate bids are less, all bidders receive full allotment.
Auction calendar and notification
The RBI publishes its auction calendar at the start of each financial year (April) covering T-Bill and G-Sec auction dates for the next 12 months. Individual auction notifications with specific series, amounts, and dates are released 4–7 days before the auction.
Where to find auction notifications:
- RBI website (rbi.org.in): Under Notifications → Auction Calendar and Open Market Operations → Scheduled Auctions.
- Kite platform: Zerodha populates primary auction opportunities in the G-Sec/debt section when auctions are open for non-competitive bidding.
- RBI Retail Direct portal: Under Primary Market → Upcoming Auctions.
- NSE website: nseindia.com lists G-Sec and T-Bill auction dates.
Typical weekly auction schedule (as at 2026):
| Day | Auction notification | Bidding window opens | Auction date | Settlement |
|---|---|---|---|---|
| Monday–Tuesday | RBI notification released | NSE/RD window opens | Friday | T+1 (Monday) |
The non-competitive bidding window on NSE (and through Kite) is typically open from the day the notification is released until the morning of the auction date (by approximately 11:30 AM on the auction day).
Route A: Bidding via Zerodha Kite
This route is available to all Zerodha customers with a Kite account and does not require a separate RBI Retail Direct account. Zerodha submits aggregate non-competitive bids to NSE on behalf of customers.
Step 1: Add funds to the Zerodha ledger
Non-competitive G-Sec bids require pre-funding of the full estimated settlement amount. Because the final allotment price is the weighted average yield of the competitive portion (announced after the auction), the exact settlement amount is not known in advance. However, a reasonable estimate can be made from recent secondary market prices or from the previous auction’s cut-off yield.
For T-Bills: Settlement amount per unit ≈ Rs 25,000 × (1 − (estimated yield × days to maturity / 365)).
For dated G-Secs: Settlement amount per unit ≈ market price per Rs 100 face value × units × face value, plus accrued interest.
Add funds via the Kite Funds tab using IMPS or net banking. Ensure the funds are in the ledger before the bidding window closes.
Step 2: Locate the auction in Kite
Log in to Kite at kite.zerodha.com. Navigate to the debt or G-Sec section. Zerodha’s Kite platform typically surfaces active primary G-Sec and T-Bill auctions in a dedicated section when the non-competitive window is open.
Alternatively, use the universal search bar (Ctrl+/) and search for the specific G-Sec series name (e.g., “7.26 GS 2033 PRIMARY” or the T-Bill notation for the relevant tenor).
If you cannot locate the primary auction option on Kite, check Zerodha’s support page or the NSE website for whether non-competitive bidding for that specific series has been extended to retail investors via the NSE scheme. Not all G-Sec series are eligible for the NSE non-competitive retail window; only those explicitly included by NSE in each auction are accessible through Kite.
Step 3: Enter the non-competitive bid
Once you have located the auction instrument on Kite, open the bid form.
Bid form fields:
- Bid type: Non-Competitive (retail investors cannot submit competitive bids through the NSE retail scheme or through Kite).
- Face value amount: Enter the total face value you wish to subscribe. For T-Bills, this is in multiples of Rs 25,000. For dated G-Secs, this is in multiples of Rs 10,000.
- Quantity (units): Derived from face value. For T-Bills, 1 unit = Rs 25,000 face value. For G-Secs, 1 unit = Rs 100 face value.
- Price / yield: Leave blank or set to “Non-Competitive” as the system determines the price post-auction.
Review the bid summary and submit. You will receive a confirmation reference number.
Step 4: Monitor the auction result
Auction results are typically announced the same day as the auction (Friday, by approximately 5:00 PM to 6:00 PM for G-Sec and T-Bill auctions). The RBI’s press release announces the cut-off yield and the weighted average yield.
The weighted average yield becomes your allotment yield; your settlement amount is calculated based on this yield.
Post-auction, Kite’s order section should reflect the allotment status and the tentative settlement amount. Zerodha sends an email or SMS confirmation for successful allotment.
Step 5: Verify demat credit (T+1 from auction date)
Settlement for primary auction allotments is T+1 from the auction date. For a Friday auction, settlement occurs on Monday (or Tuesday if Monday is a market holiday).
On the settlement date, the G-Sec or T-Bill units appear in Portfolio → Holdings on Kite. Confirm:
- ISIN matches the auctioned security.
- Units held match the allotted quantity.
- Settlement amount deducted from the ledger matches the allotment price.
If the pre-funded amount exceeds the actual settlement amount (due to the weighted average yield being more favourable than estimated), the surplus is returned to your Zerodha ledger.
Route B: Bidding via RBI Retail Direct
RBI Retail Direct (rbiretaildirect.org.in) is a fully government-operated platform that allows retail investors to buy G-Secs and T-Bills directly from the RBI without a broker. There is no brokerage charge for primary auction participation through this route.
Opening an RDGA
To use Retail Direct, investors must first open a Retail Direct Gilt Account (RDGA):
- Visit rbiretaildirect.org.in and click Register.
- Complete KYC: provide PAN, Aadhaar OTP verification, savings bank account details (for settlement), and demat account details (optional, Retail Direct has its own SGL-linked demat equivalent).
- Once the RDGA is approved (typically within a few business days), the account is active.
Submitting a bid on Retail Direct
- Log in to rbiretaildirect.org.in.
- Navigate to Primary Market → Upcoming Auctions.
- Select the T-Bill or G-Sec auction.
- Enter the face value amount you wish to bid.
- Confirm payment from the linked bank account (payment is debited immediately as escrow; excess is refunded post-settlement).
- Submit and note the bid reference number.
Post-auction, allotment details appear under Portfolio → Primary Market Transactions. The securities appear in the RDGA’s equivalent holding statement.
Retail Direct versus Kite: which to use
| Factor | Zerodha Kite | RBI Retail Direct |
|---|---|---|
| Brokerage | Rs 20 per order or 0.03% | Nil |
| Account required | Existing Zerodha account | Separate RDGA required |
| Secondary market access | Yes (Kite) | Yes (Retail Direct secondary market, limited) |
| Coupon/maturity credits | Linked bank account | Linked bank account |
| Ease of use | Familiar Kite interface | Separate portal, distinct KYC |
| G-Secs in same demat | Yes (CDSL) | RDGA (separate ledger) |
For most active Zerodha users, the Kite route is more convenient. The brokerage on a single G-Sec bid is typically Rs 20, a negligible cost for a Rs 10,000+ investment. Investors who prefer zero brokerage and are comfortable managing a separate portal should open an RDGA.
Tax treatment
Primary auction G-Sec and T-Bill allotments have identical tax treatment to secondary market purchases of the same instruments. See How to buy a G-Sec on Zerodha Kite and How to buy a T-Bill on Zerodha for full tax details. Key points:
- G-Sec coupon interest: Taxable at income slab rate; no TDS.
- T-Bill discount (maturity proceeds − purchase price): Treated as short-term capital gain; taxable at slab rate.
- Capital gains on secondary market sale before maturity: STCG if held less than 36 months (slab rate); LTCG if held 36 months or more (20% with indexation).
What can go wrong
- Bidding window missed. The non-competitive window on NSE (Kite route) closes on the auction day, typically by 11:30 AM. Missing the deadline means waiting for the next auction. Set a calendar reminder for auction dates.
- Insufficient funds in the ledger at settlement. Even though you pre-funded, if the actual settlement amount exceeds your estimate (for example, if the weighted average yield is lower than expected, resulting in a higher price for G-Secs), the shortfall may require additional funds. Zerodha may square off the position if the ledger is insufficient.
- Pro-rata allotment in oversubscribed auctions. If aggregate non-competitive bids exceed 5% of the notified amount, allotment is pro-rata. You may receive fewer units than bid for.
- RDGA approval delay. Opening an RDGA can take 3–7 business days. Apply well in advance if you want to participate in the next auction.
- Weighted average yield lower than secondary market. In some auctions, the competitive bidding results in a weighted average yield lower than the current secondary market yield. In such cases, the primary auction price is effectively higher than the secondary market price for the same G-Sec. Monitor both options before committing.
- Zerodha not offering the specific auction. Not all G-Sec series are included in NSE’s non-competitive retail window. If a specific series is not available on Kite, consider the RBI Retail Direct route or buying in the secondary market.
Related guides
- How to buy a G-Sec on Zerodha Kite
- How to buy a T-Bill on Zerodha
- How to track G-Sec coupon receipts on Console
- G-Secs on Zerodha, encyclopedic overview
- Reserve Bank of India, the primary auction administrator
- CDSL, depository for Zerodha customers
Conflict of interest disclosure
WebNotes Editorial Team has no financial relationship with Zerodha, RBI, NSE, or any government securities entity. This guide is for informational purposes only and does not constitute investment advice.
References
- RBI, Scheme for Non-Competitive Bidding Facility in the Auctions of Government Securities, RBI/2020-21/65, November 2020, rbi.org.in.
- RBI, Retail Direct Scheme: Operational Guidelines, October 2021, rbiretaildirect.org.in.
- RBI, Government Securities Auction Calendar 2025-26, rbi.org.in.
- NSE, Non-Competitive Bidding Scheme for G-Secs and T-Bills: Retail Participation, nseindia.com.
- Income Tax Act, 1961, Sections 56, 112 (income from G-Sec coupons and capital gains).
- Zerodha Support, “Bidding in G-Sec primary auctions via Kite”, support.zerodha.com.
- RBI, FAQs: RBI Retail Direct, rbi.org.in.
- SEBI Circular, Strengthening of retail debt market participation, SEBI/HO/DDHS/2022.