State governments accept ₹27,805.61 crore in securities auction

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State securities auction proceeds

Highlights

State governments accepted bids worth a total of ₹27,805.607 crore, below the ₹29,900 crore target, for maturities ranging from 2031 to 2056.
Cut-off yields ranged from 7.7536% to 8.1771%, reflecting varying borrowing costs across states.
States such as Gujarat and Punjab accepted more than their target amounts, while Maharashtra accepted no amount for its 2049 re-issue.

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

Auction results and amounts accepted

According to an RBI press release, Andhra Pradesh, Delhi, Goa, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Meghalaya, Punjab, Rajasthan, Telangana and West Bengal bid for various re-issues of State Development Loans (SDLs). Against a total target of ₹29,900 crore, bids worth ₹27,805.607 crore were accepted, covering securities with maturities ranging from 2031 to 2056.

Andhra Pradesh accepted the full ₹1,000 crore and ₹2,000 crore for its two issuances, while Delhi fully accepted one ₹500 crore issuance and another ₹500 crore 15-year issuance. Gujarat accepted ₹1,500 crore against a target of ₹1,000 crore in the re-issue of 7.96% Gujarat SGS 2035, and the full ₹1,000 crore in the re-issue of 8.06% Gujarat SGS 2038.

Madhya Pradesh accepted the full amounts of ₹1,000 crore, ₹1,000 crore and ₹2,000 crore across its three issuances. Maharashtra accepted ₹1,500 crore, ₹1,500 crore and ₹2,000 crore, respectively, in issuances maturing in 2031, 2039 and 2043, but accepted no amount in the ₹2,200 crore re-issue maturing in 2049. Punjab accepted ₹1,500 crore against a target of ₹1,000 crore in the re-issue of 7.91% Punjab SGS 2041.

Yields, pricing and market signals

The auction results show varying borrowing costs across states and maturities. Available data puts cut-off yields in a range of about 7.7536% to 8.1771%, while some issuances are listed only by yield and maturity, including certain securities from Telangana, Rajasthan, Meghalaya and Delhi.

West Bengal partially accepted ₹1,504.500 crore in the ₹2,000 crore re-issue maturing in 2041 and ₹1,601.107 crore in the ₹2,000 crore re-issue maturing in 2047. Meanwhile, Karnataka, Goa, Andhra Pradesh and several other states accepted the full amounts specified for their respective issuances, pointing to selective demand and pricing discipline in auction-based state borrowing.

Our earlier article discussed the RBI’s higher GDP growth and CPI inflation forecasts for FY27 alongside a 25-basis-point repo rate hike and a 'calibrated tightening' stance. It also noted that tight policy signals amid food and fuel pressures, a weak monsoon and elevated commodity prices could affect market yields and borrowing costs, while measures such as OMO operations to absorb excess liquidity were also announced.

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