State governments to auction securities worth ₹29,900 crore on November 3

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Auction of state securities

Highlights

According to the Reserve Bank, securities worth ₹29,900 crore issued by state governments will be auctioned on the E-Kuber system on November 3, 2026.
Major issues will be re-issues, with Gujarat and Punjab each offering a ₹500 crore greenshoe option, while some securities will be offered through yield-based auctions.
Up to 10% of the notified amount of each security will be available to eligible retail and institutional investors under the non-competitive scheme, while banks can hold these securities as SLR investments.

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

Auction structure and schedule

According to the Reserve Bank of India (Reserve Bank of India), the auction will be held on Tuesday, November 3, 2026, on RBI's core banking solution, the E-Kuber system. Both competitive and non-competitive bids will be submitted electronically. Competitive bids can be submitted from 10:30 a.m. to 11:30 a.m., while the window for non-competitive bids will run from 10:30 a.m. to 11:00 a.m.

The ₹29,900 crore borrowing programme includes Andhra Pradesh, Delhi, Goa, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Meghalaya, Punjab, Rajasthan, Telangana and West Bengal. Gujarat and Punjab have also included a greenshoe option to borrow an additional ₹500 crore each for some issues.

Most issues are re-issues of previously issued state government bonds, while some securities are being offered through yield-based auctions. The results of successful bids will be announced on November 3, 2026, and payment will be made during banking hours on Wednesday, November 4, 2026, in Mumbai and at the relevant RBI regional offices.

Market access and impact on the banking sector

Up to 10% of the notified amount of each security will be allocated to eligible individual and institutional investors under the non-competitive bidding facility scheme. For a single bid in any one security, the limit will be up to 1% of its notified amount. Retail investors can also bid through the RBI Retail Direct portal.

The minimum nominal investment in these securities is ₹10,000, with additional investments in multiples of ₹10,000. Bidders can enter the expected yield or price to two decimal places, and the RBI will set the maximum acceptable yield or minimum price.

Interest rates on new state government securities will be determined at auction, with interest paid semi-annually on May 4 and November 4 each year. Re-issued securities will retain the interest rate set on their original issue date. These investments will qualify as government securities eligible for banks' Statutory Liquidity Ratio (SLR) and will also be eligible for the Ready Forward facility.

Our previous report discussed the practice of indirect evergreening at banks, in which some undercapitalized banks route funds through related parties to delay the recognition of bad loans and create the appearance of recovery. The article noted that such loans are more prone to default and that their growth could weigh on bank shares and increase risks to broader financial stability, underscoring the need for targeted regulatory and supervisory measures.

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