Amid growing interest from insurance and pension funds to invest in long-term government securities, India will issue bonds with an extra-long maturity period of 50 years, according to borrowing plans released by the Reserve Bank of India.

The 50-year bonds, to be issued for the first time, are in addition to the long-dated 30- and 40-year securities currently sold by the RBI.

“Long-term investors like insurers will have a natural demand for the 50-year paper. Most insurance companies require longer-duration bonds for their asset-liability management,” Churchil Bhatt, executive vice-president at Kotak Mahindra Life Insurance, told Reuters.

The government is looking to raise around Rs 30,000 crore through these 50-year bonds, which amounts to 5% of the Rs 6.55 lakh crore it plans to borrow in the second half of this fiscal. India’s total debt borrowing for the year ending 31 March 2024 is projected at Rs 15.43 lakh crore. Of this, Rs 8.88 lakh crore would be borrowed between April and September through bonds with maturities of 5, 7, 10, 14, 30 and 40 years.

The inflows from these bonds will be used to fund the country’s fiscal deficit, which has been widening because of the spends during the COVID-19 pandemic lockdowns. The government’s fiscal deficit target for the current year stands at 5.9%.

The news comes days after JPMorgan Chase & Co. announced India’s inclusion in its government bonds index for emerging markets, raising hopes of greater foreign inflows into India’s debt securities market. However, there have been some concerns as India has reiterated that it will not be making any changes to its taxation system to push for Indian bonds’ inclusion in global indices.

According to an unnamed government official cited in a Bloomberg report, authorities are increasing the tenure of debt sold and trying to make the best of yields declining after India’s inclusion in the index. Besides, declines in yields from longer-dated debts have surpassed those with shorter maturity this year.

SEBI mulling extended trading hours: On a separate note, the Securities and Exchange Board of India is reviewing the National Stock Exchange’s proposal to extend trading hours.

The NSE had sought the market regulator’s nod for an extended evening trading session between 6 and 9 pm IST for the futures and options segment. It has proposed that evening-session trades be settled the next day.

According to a Reuters report, SEBI is looking at whether extended trading hours will inflate the already high derivative trades and if it is equipped to handle smooth settlements.

“For smooth settlement of trades, both the NSE and BSE and their respective clearing corporations need their systems to be prepared to handle extended trading hours,” the Reuters report cited a person in the know as saying.