This is the fourth on-tap stock to be issued this fiscal. The Reserve Bank has mopped up Rs 7929.03 crore through three tap stocks of three-, six- and ten-year maturity in June and July this year.

The 15-year on-tap bond is the longest maturity paper floated this fiscal. Earlier, on July 1, the RBI floated a 12-year paper offering a 12.25 per cent. It mopped up Rs 1000 crore through the paper.

According to money market sources, currently there are a few 15-year instruments in the secondary market. However, these instruments are not traded as there is no demand for instruments maturing beyond 12 years.

Fund managers are of the view that by issuing a 15-year `on tap' bonds the centre wants to tap the insurance and provident funds.

The 15-year tap stock will be issued for a minimum amount of Rs 10,000face-value and in multiples of Rs 10,000. The interest on government stock will be paid half-yearly and repaid at par on August 20, 2013. The government stock will be eligible for ready forward facility.

The announcement of the 15-year on-tap issue took the market by surprise. "We were not expecting an on-tap issue so soon after the Rs 3000 crore five-year paper auction held last week," said market sources.

Said Kishor Chaukar, managing director, I-Sec: "Although the market is surprised by the long-term instrument, the yield offered by the central bank is reasonable and the market will respond positively."

The RBI auctioned a five-year 2003 government stock last week which sailed through smoothly without any devolvement on Reserve Bank of India (RBI) or primary dealers. It received 167 applications worth Rs 5567.16 crore for a notified amount of Rs 3000 crore at a high coupon rate of 11.78 per cent. RBI accepted 73 bids worth Rs 3000 out of which 23 bids were partially allotted.

With the Rs 3000crore five-year paper auction last week, the centre has completed Rs 55,398.72 crore out of a gross borrowing programme of Rs 79,000 crore in the current fiscal.