Allocation of ₹21,491 crore in RBI's State Development Loan auction, one Jammu & Kashmir offer not accepted

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Highlights

In the Reserve Bank of India's State Development Loan auction, ₹21,491.03 crore was allocated against a notified amount of ₹21,700 crore.
The cut-off yield ranged between 7.31% and 7.71%, with the Delhi 2033 security at 7.31% and the West Bengal 2047 security at 7.71%.
No amount was accepted for the Jammu & Kashmir 2038 security, while strong investor demand was seen in other states.

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

Auction Results and State Allocations

As reported in the Reserve Bank of India press release, the total notified amount for the state government securities auction on July 21, 2026, was ₹21,700 crore, against which a total allocation of ₹21,491.03 crore was made. The total amount received from competitive bids was ₹76,251.25 crore, and from non-competitive bids, ₹1,279.691 crore.

For Assam's 2036 security, ₹991.03 crore was allocated against a notified amount of ₹1,000 crore. Bihar's 2041 and 2044 securities received full allocations of ₹1,000 crore each, while Chhattisgarh's 2040 and 2048 securities were allocated ₹500 crore each.

Kerala's 2042 and 2049 securities were allocated ₹1,000 crore and ₹1,200 crore, respectively. Madhya Pradesh's 2034, 2038, and 2048 securities were allocated ₹1,000 crore, ₹1,400 crore, and ₹2,000 crore, respectively, while Delhi's 2033 and 2041 securities were allocated ₹300 crore each.

Odisha 2044 received ₹1,000 crore, Tamil Nadu 2034 and 2041 received ₹1,000 crore each, Uttar Pradesh 2038 and 2046 received ₹1,000 crore and ₹1,600 crore, Uttarakhand 2048 received ₹400 crore, and West Bengal 2035 and 2047 received ₹1,600 crore and ₹2,200 crore, respectively.

Yield, Demand, and Market Signals

The cut-off yield for various securities ranged from 7.31% to 7.71%, reflecting different tenors and state risk assessments. The 7-year Delhi 2033 security saw a cut-off yield of 7.31%, while longer-term securities like Bihar 2044 and West Bengal 2047 saw yields up to 7.71%.

The press release noted that Assam accepted ₹991.03 crore partially in the 10-year security. Jammu & Kashmir did not accept any amount for its 7.60% 2038 re-issue, while its 2051 security was allocated ₹500 crore.

Overall, the auction saw strong bidding interest compared to the notified amount, but final acceptance depended on state-wise pricing and borrowing terms. This indicates sustained investor demand in the state borrowing market, although some issuers remain selective about yield levels in certain offers.

Our previous report discussed the changes in Nifty's ESG and Shariah indices under the July review by NSE Indices Limited, which were to take effect from July 31, 2026. This included the removal of TCS from Nifty100 ESG/Nifty100 Enhanced ESG, exclusions and inclusions in Nifty500 Shariah, and highlighted that such revisions are significant signals for index funds, ETFs, and portfolio trackers.

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