The Reserve Bank of India has released the state government securities auction results for 12 states. A total of ₹19,200 crore was accepted against a target of ₹22,200 crore. Therefore, the auction saw partial subscription across participating states.
State Government Securities Auction: Key Details
West Bengal raised the highest amount, accepting ₹4,700 crore across three securities. Haryana followed closely, securing ₹2,500 crore through two re-issued bonds. Additionally, Tamil Nadu accepted only ₹2,000 crore out of its ₹5,000 crore target, rejecting bids on two tranches entirely.
Bihar accepted ₹2,000 crore across two securities at cut-off yields of 7.88% and 7.96%. Meanwhile, Kerala raised ₹1,800 crore through re-issues maturing in 2033 and 2039. Uttar Pradesh also accepted ₹2,500 crore, spanning tenors from 6 to 25 years.
Sikkim stood out as the only state issuing fresh securities rather than re-issues. It raised ₹400 crore — ₹200 crore each for 4-year and 16-year tenors. Consequently, its cut-off yields were fixed at 7.55% and 7.98%, respectively.
Smaller states also participated actively. Jharkhand raised ₹200 crore, while Chhattisgarh accepted ₹500 crore across two tranches. Uttarakhand raised ₹300 crore through a re-issue of its 2048 bond at a yield of 7.97%.
What the State Government Securities Auction Means for Investors
Cut-off yields across most securities ranged between 7.70% and 7.99%. However, shorter-tenor bonds like West Bengal’s 2031 security and Uttar Pradesh’s 2032 bond attracted lower yields near 7.70%. As a result, investors seeking longer duration fixed income options may find state government securities attractive at current levels.
Tamil Nadu’s decision to reject bids on two tranches signals that states retain the right to set price expectations. Therefore, auctions do not always result in full subscription. This outcome can reflect a mismatch between state expectations and market-offered yields.
For retail and institutional investors, state government bonds offer sovereign-backed safety alongside slightly higher yields than central government securities. Additionally, these bonds contribute directly to state infrastructure and development financing. Overall, the auction reinforces steady demand for long-duration state paper in the Indian debt market.
Source: RBI Press Releases
