In the auction of state government securities, ₹21,491.03 crore was accepted against ₹21,700 crore.

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State securities auction acceptance

Highlights

In the Reserve Bank of India's auction of state government securities, ₹21,491.03 crore was accepted against ₹21,700 crore.
Yields on long-term securities ranged between 7.5% and 7.7%, while short-term securities were accepted at 7.31% in Delhi and 7.39% in Madhya Pradesh.
Assam partially accepted ₹991.03 crore and Jammu & Kashmir fully rejected one re-issuance, reflecting states' caution over borrowing costs.

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

Auction Results and Borrowing Details

As reported in the Reserve Bank of India press release, several borrowers including Bihar, Kerala, Madhya Pradesh, Odisha, Tamil Nadu, Uttar Pradesh, Uttarakhand, and West Bengal received acceptance in line with the notified amount in the yield/price-based auction of state government securities. The total accepted amount stood at ₹21,491.03 crore, slightly below the announced ₹21,700 crore.

Assam accepted ₹991.03 crore against ₹1,000 crore in its 10-year security. Jammu & Kashmir did not accept any amount in the re-issuance of 7.60% Jammu & Kashmir SGS 2038 dated July 8, 2026, against ₹200 crore, while its re-issuance of 7.81% Jammu & Kashmir SGS 2051 saw full acceptance of ₹500 crore.

Bihar raised ₹1,000 crore each in its 15-year and 18-year securities, with yields of 7.66% and 7.71% respectively. Delhi accepted ₹300 crore at 7.31% in its 7-year security and ₹300 crore at a 7.5995% yield in the 2041 maturity re-issuance. Madhya Pradesh raised ₹1,000 crore, ₹1,400 crore, and ₹2,000 crore in its 8-year, 12-year, and 2048 maturity re-issuances, respectively.

Kerala accepted ₹1,000 crore and ₹1,200 crore in its 2042 and 2049 maturity re-issuances, respectively. Tamil Nadu raised ₹1,000 crore each in two re-issuances maturing in 2034 and 2041, while Uttar Pradesh accepted ₹1,000 crore and ₹1,600 crore in re-issuances maturing in 2038 and 2046. West Bengal raised ₹1,600 crore and ₹2,200 crore in its 9-year and 21-year securities.

Yield Signals and Market Impact

The auction results show that yields on long-term state borrowings generally ranged between 7.5% and 7.7%, though some shorter-term papers saw lower yields. The 7-year Delhi security was accepted at 7.31% and the 8-year Madhya Pradesh security at 7.39%, indicating relatively softer pricing for shorter-term debt.

On the other hand, the 18-year Bihar and Odisha securities hovered around 7.70% to 7.71%, while the 21-year West Bengal security was also accepted at 7.71%. This suggests sustained investor demand for long-term state debt, but also higher borrowing costs as the tenor increases.

Selective acceptance also indicates that issuers remain cautious about yield levels. Assam's partial acceptance and Jammu & Kashmir's complete rejection of one re-issuance signal that some states are exercising greater discipline over borrowing costs relative to market pricing.

Our previous report discussed the changes in NSE's Nifty indices under the July review of ESG and Shariah benchmarks that were to take effect from July 31, 2026. This included steps such as the removal of TCS from Nifty100 ESG and Nifty100 Enhanced ESG, and the exclusion/inclusion of certain companies in Nifty500 Shariah, impacting the tracking and portfolio rebalancing of index funds, ETFs, and other benchmark-based investment products.

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