The Reserve Bank of India recently released the results of the latest state government securities auction. A total of ₹23,016.42 crore was raised against a targeted ₹24,400 crore. Eleven states and union territories participated in this yield and price-based auction.
Key Details of the State Government Securities Auction
Maharashtra emerged as the largest borrower, raising ₹8,000 crore across four tranches. Madhya Pradesh followed closely, accepting ₹6,500 crore through multiple securities. Meanwhile, Rajasthan secured ₹3,500 crore across three separate instruments.
Cut-off yields ranged broadly across states and tenors. For example, Gujarat’s 12-year paper cleared at 8.06%, while Maharashtra’s 15-year bond settled at 8.14%. Additionally, Tripura’s 24-year security fetched a yield of 8.19%, one of the highest in this auction round.
Andhra Pradesh did not accept any amount in the re-issue of its 7.68% SGS 2051. However, all other participating states successfully raised funds. Punjab accepted only a partial amount of ₹316.42 crore against a target of ₹700 crore in one of its securities.
What This Means for Investors and State Finances
State government securities are important fixed-income instruments for institutional investors in India. They typically offer slightly higher yields than central government bonds. As a result, banks, insurance companies, and provident funds actively participate in these auctions.
The cut-off yields in this state government securities auction signal the current market appetite for sub-sovereign debt. Higher yields on longer-tenor papers reflect investor demand for a liquidity premium. Therefore, states borrowing at longer maturities are paying a modest premium over shorter-dated peers.
Shorter-tenor papers also drew strong demand. For instance, Madhya Pradesh’s four-year security cleared at a yield of 7.77%. Tripura’s eight-year bond settled at 8.03%, reflecting steady investor interest across the maturity spectrum.
States That Participated
The following states and union territories participated in this round: Andhra Pradesh, Goa, Gujarat, Jammu and Kashmir, Madhya Pradesh, Maharashtra, Meghalaya, Punjab, Rajasthan, Telangana, and Tripura. Together, they initially targeted ₹24,400 crore. However, the final accepted amount stood at ₹23,016.42 crore due to partial and nil acceptances by Punjab and Andhra Pradesh respectively.
This auction reflects continued state-level borrowing activity as governments fund their fiscal requirements for 2026-27. Investors can track future auction schedules through the RBI website.
Source: RBI Press Releases
