₹230.16418 billion raised in state government securities auction

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State securities auction raises ₹230.16418 billion

Highlights

States accepted ₹230.16418 billion out of total planned borrowings of ₹244 billion in the RBI auction.
Goa, Gujarat, Madhya Pradesh, Maharashtra, Telangana, Tripura and other states accepted their planned or nearly full amounts, while Andhra Pradesh accepted none.
Variations in cut-off yields and prices across states and securities indicate changing investor pricing expectations and future borrowing costs.

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

Auction results and acceptances

According to an RBI press release, in this yield- and price-based auction, several states, including Goa, Gujarat, Jammu and Kashmir, Madhya Pradesh, Maharashtra, Meghalaya, Rajasthan, Telangana and Tripura, accepted all or nearly all of their planned borrowings. Total planned borrowing stood at ₹244 billion, while the accepted amount was recorded at ₹230.16418 billion.

Goa accepted ₹2 billion, Gujarat ₹10 billion, Jammu and Kashmir ₹8 billion, and Meghalaya ₹1 billion. Telangana accepted the full amount in two issues of ₹10 billion each, while Tripura fully accepted issues of ₹3 billion and ₹5 billion.

Madhya Pradesh accepted its planned amounts across several tenors, including issues of ₹10 billion, ₹20 billion and ₹15 billion. Maharashtra also fully accepted issues of ₹15 billion, ₹20 billion, ₹20 billion and ₹25 billion, while Rajasthan completed issues of ₹10 billion, ₹15 billion and ₹10 billion.

Borrowing signals and market impact

The results show that investor demand remains intact for most states' reissues, although not all issues are receiving the same response. Andhra Pradesh did not accept any amount against its proposed ₹10 billion reissue, making it the most notable exception in this auction.

Punjab accepted only ₹3.16418 billion against one issue of ₹7 billion, while its other ₹8 billion issue received full acceptance. Differences in cut-off yields and prices indicate that investors' pricing expectations remain varied across maturities and issuers, which could affect states' borrowing costs and future auction strategies.

Our previous report estimated a sharp increase in states' market borrowings through State Government Securities (SGS) in Q3 FY2027 based on the RBI's auction calendar. It noted that net SGS issuance is likely to remain high even after redemption adjustments, with several large states accounting for a greater share of the additional borrowing, alongside a broader adoption of the Benchmark Issuance Strategy (BIS) by several states.

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