State governments to raise ₹24,800 crore in RBI auction

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State loans in RBI auction

Highlights

Andhra Pradesh, Gujarat, Maharashtra, Meghalaya, Mizoram, Punjab, Rajasthan, Tamil Nadu, and Telangana will participate in the ₹24,800 crore state loan securities auction.
The auction will be held on July 14, 2026, on RBI’s E-Kuber system, with Maharashtra as the largest borrower and various states issuing multi-tranche and yield-based offerings.
10% of the securities’ amount will be reserved for non-competitive bidding, which will also be eligible for banks’ SLR and ready forward facility, with interest rates determined by auction.

This article was translated from the original. Read the original version by our correspondent here.

Auction Size and Timeline

As per the Reserve Bank of India press release, Andhra Pradesh, Gujarat, Maharashtra, Meghalaya, Mizoram, Punjab, Rajasthan, Tamil Nadu, and Telangana are participating in this auction. The total borrowing program of ₹24,800 crore includes securities of varying maturities, with some new yield-based offerings and some reissues of previously issued state government securities.

The auction will be conducted on RBI’s Core Banking Solution, E-Kuber system, on Tuesday, July 14, 2026. Competitive bids can be submitted electronically from 10:30 AM to 11:30 AM, and non-competitive bids from 10:30 AM to 11:00 AM.

Maharashtra is the largest borrower in this issuance, raising funds through multiple reissues. Andhra Pradesh, Punjab, Rajasthan, Tamil Nadu, and Telangana are also bringing multi-tranche issuances, while Gujarat, Meghalaya, and Mizoram are offering yield-based securities.

Investor Participation and Market Impact

Up to 10 percent of the notified amount of each security will be allocated to eligible individuals and institutions under the non-competitive bidding facility, with a single bid limit of up to 1 percent of the notified amount of the respective security. Retail investors can also bid in the non-competitive category via the RBI Retail Direct portal.

The RBI will determine the maximum acceptable yield or minimum acceptable price, and the securities will be issued at a minimum face value of ₹10,000 and in multiples of ₹10,000 thereafter. Auction results will be announced on July 14, 2026, and successful bidders must make payment during banking hours on July 15, 2026.

Interest rates on new state government securities will be determined in the auction, with interest payable semi-annually on January 15 and July 15 each year. These securities will qualify as eligible government investments for banks under the Statutory Liquidity Ratio (SLR) and will also be eligible for ready forward facility, maintaining their utility in the state borrowing market.

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