NEW DELHI (CU)_There appears to be an increase in interest in paper gold in India, particularly in sovereign gold bonds (SGBs), as Series I recoded the second highest subscription by volume and value since the gold bonds were launched back in 2015.
The subscription of this series ended on 21 May, with its quantity equalling 5.32 tonnes, while the subscription came in at ₹25,410,000,000 by value. This value was higher than the total value subscribed in SGBs in entire FY20, which amounted to ₹23,163,700,000. The subscription in FY21 stood at a whopping ₹160,487,400,000.
The highest subscription received for SGBs to date has been in Series V in FY21, totalling 33,870,000,000 in value and 6.35 tonnes in terms of quantity.
This increase in sovereign gold bonds by investors has meant that brokering firms such as Zerodha has recorded a significant growth in its platforms recently, with volumes rising from around 10 kilograms, prior to April 2020, to 100-200 kilograms over the last few issues. According to the financial institution, of these issues, SGB Series I was its highest ever, with a volume of 250kgs.
Meanwhile, HDFC Securities, another brokering firm in India, launched SGBs on the same day it was made available for trading, back in July 2016. Like Zerodha, HDFC Securities also recorded a robust growth, as subscription in 2020-2021 saw a growth of 8-9 times from the period between 2016 and 2017. “The pandemic uncertainties have led retail investors to safe haven asset like gold,” Ashish Rathi, Whole Time Director of HDFC Securities, said. “Many retail investors have opted for paper form of investment due to lockdown restrictions and storage risk.”
Every financial year the government of India comes out with around 10-12 series of sovereign gold bonds, with subscription for two series for FY22 having already been concluded. Series III is set to be concluded on Friday (4 June), while the fourth one will be launched on 12 July.
