The Reserve Bank of India has released the state government securities auction results for multiple states. In total, 12 states and union territories raised ₹27,805.607 crore against a target of ₹29,900 crore through this auction round.
State Government Securities Auction: Key Results
Andhra Pradesh successfully raised ₹3,000 crore across two securities. These included re-issues of its 2035 and 2056 bonds at yields of 8.0089% and 8.1463% respectively. Karnataka and Madhya Pradesh also completed their full targets, each raising ₹2,000 crore and ₹4,000 crore respectively.
Gujarat accepted an additional ₹500 crore beyond its original target in its 2035 bond re-issue. Similarly, Punjab accepted an extra ₹500 crore in its 2041 bond. However, Maharashtra declined to accept any amount in its 7.70% SGS 2049 re-issue, leaving ₹2,200 crore unraised from that tranche.
West Bengal accepted only partial amounts in two of its three securities. It raised ₹1,504.50 crore against a ₹2,000 crore target for its 2041 bond. Additionally, it accepted ₹1,601.107 crore against a ₹2,000 crore target for its 2047 bond.
What This Means for Bond Markets and Borrowers
Yields across most securities ranged between 7.75% and 8.17%, reflecting current market conditions. Telangana, for example, issued fresh 20-year and 26-year bonds at 8.17% and 8.15% respectively. Meanwhile, Rajasthan also issued new securities with yields of 8.04% and 8.15% for 11-year and 21-year tenors.
The shortfall of roughly ₹2,094 crore from the total target was largely due to Maharashtra’s rejection and West Bengal’s partial acceptance. As a result, total market borrowing came in below the announced target. Therefore, states may need to reschedule their remaining borrowing requirements in upcoming auctions.
These state government securities, also called SDL auctions, are a key mechanism through which Indian states fund their fiscal deficits. Investors, including banks and insurance companies, actively participate in these auctions. The cut-off yields help set benchmarks for sub-sovereign borrowing costs across India.
Source: RBI Press Releases
