The Reserve Bank of India conducted a state government securities auction on June 23, 2026. In total, 18 securities across 10 states raised ₹17,900 crore. The auction drew strong investor interest, with competitive bids totalling over ₹68,417 crore against a notified amount of ₹16,900 crore.
Key Highlights of the State Government Securities Auction
Bihar raised ₹2,400 crore across two securities — the 2035 and 2041 series. The cut-off yields came in at 7.62% and 7.78% respectively. Meanwhile, Chhattisgarh successfully raised ₹1,000 crore, with yields at 7.62% for its 2036 bond and 7.77% for the 2048 paper.
Gujarat stood out prominently in this auction. The state accepted an additional ₹500 crore each in its 9-year and 13-year securities, raising ₹3,000 crore in total. As a result, Gujarat’s cut-off yields were notably lower at 7.43% and 7.61%, reflecting relatively stronger demand.
Tamil Nadu raised ₹3,000 crore across three bonds maturing in 2033, 2036, and 2041. Additionally, Uttar Pradesh raised ₹1,700 crore through re-issues of its 2036 bond and a new 15-year security. Kerala successfully raised ₹1,800 crore at a cut-off yield of 7.77%.
What This Means for Investors and State Finances
The strong overbidding across all securities signals healthy demand for sub-sovereign debt in India. For example, Madhya Pradesh’s 2048 bond attracted bids worth ₹5,435 crore against a notified amount of just ₹1,200 crore. Therefore, states are successfully borrowing at competitive rates to fund their fiscal requirements.
Himachal Pradesh and NCT of Delhi also participated actively. Delhi raised ₹1,500 crore through 10-year and 15-year securities, with cut-off yields of 7.57% and 7.75% respectively. However, non-competitive bids for some securities saw partial allotments, indicating high retail and smaller investor participation as well.
Overall, the weighted average yields across states ranged broadly between 7.34% and 7.78%. This range reflects each state’s credit profile and the specific tenor of each bond. Consequently, longer-dated securities generally priced at higher yields, as is typical in a normal yield curve environment.
Source: RBI Press Releases
