Upcoming SGB Redemptions In 2025 Can Cost Over Rs 6100 cr

Chennai: After the redemption of 2.2 tonnes of sovereign gold bonds so far this year, another 6.19 tonnes are up for redemption this calendar year. This would cost around Rs 6100 crore to the government at the current gold prices. SGB investors waiting for redemption could see a return of 270 per cent on their investments.

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 the World Gold Council.

Of this, 2.2 tonnes of gold have been already redeemed. The remaining 6.19 tonnes will be redeemed this year. At the current gold rates, the redemption cost of these bonds could be Rs 6141.5 crore.

Recently for the SGB Series III 2017-18, the RBI had announced the pre-mature redemption price of Rs 9,221 per bond. The issue price of the bond was Rs 2,964. The absolute return on the bonds were 211 per cent.

However, with the gold prices further going up, the redemption price of the subsequent series would be higher. At the current rates, this will provide around 270 per cent returns to the bond holders. Further, the bonds also carry an interest rate of 2.5 per cent, which are paid bi-annually.

The government has 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 and one tranche issued in 2017 have been redeemed till now.