RBI released the results of the state government securities auction worth ₹20,100 crore

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State securities auction results

Highlights

In the RBI’s state government securities auction, bids worth ₹53,804.5 crore were received against the notified amount of ₹20,100 crore.
There was a difference in cut-off yields—7.09% for Maharashtra SGS 2031, 7.47% for Gujarat SGS 2036, and 7.68%-7.69% for long-term bonds including Rajasthan SGS 2053.
In the non-competitive category, allocation of ₹1,320.858 crore against 155 bids indicates that retail and fund institutional demand remained strong.

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

Auction Results and Borrowing Size

According to the Reserve Bank of India’s press release (Reserve Bank of India), in this auction held on August 25, 2026, competitive bids worth ₹53,804.5 crore were received against the notified amount of ₹20,100 crore. ₹18,779.142 crore was allotted in the competitive category and ₹1,320.858 crore in the non-competitive category, making the total allocation equal to the notified amount of ₹20,100 crore.

In the auction, Andhra Pradesh offered securities maturing in 2039 and 2051, Gujarat in 2036 and 2041, Haryana in 2035 and 2048, Maharashtra in 2031, 2039, and 2049, Punjab in 2030 and 2039, Rajasthan in 2044 and 2053, and Tamil Nadu in 2036, 2041, and 2051. Several issuances were re-issues, including bonds previously issued in July and August 2026.

The cut-off yield varied across securities. For example, Maharashtra SGS 2031 had a cut-off yield of 7.09%, while Maharashtra SGS 2049 had 7.70%. Punjab SGS 2030 had a cut-off yield of 7.2764% and Gujarat SGS 2036 was at 7.47%, indicating relatively lower borrowing costs for short and medium-term papers.

State Demand, Pricing, and Market Signals

The total bid size indicates that investor demand remains strong in the state development loan market, though there are clear differences in pricing for different maturities and states. For some long-term issuances, such as Rajasthan SGS 2053, Andhra Pradesh SGS 2051, and Tamil Nadu SGS 2051, yields hovered around 7.68% to 7.69%, reflecting long-term risk and investor return expectations.

Partial allocation in several issuances shows that states have tried to maintain their notified borrowing limits and desired price levels. In the non-competitive category, demand of ₹1,417.244 crore came through 155 bids, of which ₹1,320.858 crore was accepted, indicating that retail and institutional non-competitive participation was also active.

This auction is part of the states’ market borrowing program for the current financial year. The yields at different maturities serve as an indicator for future state borrowing costs, investor demand, and sub-national debt market pricing.

Latest ICRA credit rating actions were the focus of our previous article, which included rating updates on various debt instruments of Veritas Finance, Axis Wind Farms (Rayalaseema), and Orange Retail Finance India. We noted that these rating decisions on securitisation transactions, wind energy projects, and NCDs provide the market with important signals regarding the issuers’ creditworthiness and repayment capacity. Such updates help investors better understand capital allocation and borrowing cost/pricing—which also provides useful context for interpreting the yield signals from the current State Government Securities (SGS) auction.

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