The Reserve Bank of India conducted a state government securities auction on July 21, 2026. States raised a total of ₹21,491.03 crore against a notified amount of ₹21,700 crore. Overall, the auction attracted strong investor interest across all maturities.
Key Details of the State Government Securities Auction
Twenty-two securities from twelve states went under the hammer. These included Assam, Bihar, Chhattisgarh, Jammu and Kashmir, Kerala, Madhya Pradesh, Delhi, Odisha, Tamil Nadu, Uttar Pradesh, Uttarakhand, and West Bengal. Competitive bids totalled ₹76,251.25 crore across 1,279 bids, reflecting robust demand.
Cut-off yields ranged broadly across states and tenors. For example, Madhya Pradesh’s 8-year SGS 2034 fetched the lowest cut-off yield at 7.39%. Meanwhile, Kerala SGS 2042 and Odisha SGS 2044 saw higher yields near 7.71–7.71%. Additionally, Jammu and Kashmir did not accept any amount in the re-issue of its 7.60% SGS 2038 security.
Assam accepted a partial amount of ₹991.03 crore against the notified ₹1,000 crore in its 10-year security. Therefore, total allotment fell slightly short of the full notified amount. Non-competitive bids worth ₹1,205.02 crore were also accepted across all states.
What This Means for Investors and Borrowers
The strong bid-to-cover ratio signals healthy appetite for state government securities among institutional investors. As a result, states can comfortably fund their fiscal needs at relatively stable borrowing costs. However, the marginal shortfall in Assam and J&K’s non-acceptance suggests some states are selective about their cost of borrowing.
Weighted average yields across the auction ranged from approximately 7.30% to 7.70%. This indicates that shorter-tenor bonds continue to attract lower yields compared to longer-dated papers. Additionally, re-issued securities generally traded at a premium price, reflecting their established market presence.
West Bengal raised the highest single amount in this auction. It mobilised ₹1,600 crore through its 9-year SGS 2035 and ₹2,200 crore through its 21-year SGS 2047. Madhya Pradesh was the largest overall borrower, raising ₹4,400 crore across three securities.
For investors tracking state government securities auction outcomes, these results offer a useful benchmark for state-level yield expectations heading into the second half of FY2026-27.
Source: RBI Press Releases
