12 Indian States Raise ₹202 Billion via RBI Bond Auction

MUMBAI — Twelve Indian state governments raised a total of ₹202 billion ($2.42 billion) through the auction of State Government Securities (SGS) and State Development Loans (SDLs) conducted by the Reserve Bank of India on Tuesday, meeting 100% of the targeted issuance. The borrowing exercise, managed by the central bank on behalf of state administrations, saw cut-off yields settle largely between 7.16% and 7.67% across various maturities, reflecting steady institutional demand amid tight sovereign liquidity management.

Strong Demand Meets ₹202 Billion Target

According to data released by the Reserve Bank of India (RBI), all 12 participating state governments fully subscribed their notified borrowing plans without devolvement. The auction encompassed a mix of fresh market loans and re-issuances across diverse tenors, ranging from short-term 6-year paper to ultra-long-term 30-year bonds.

Yields at the primary auction mirrored prevailing market conditions, with shorter tenors pricing at a notable discount compared to long-dated paper. Odisha recorded the lowest cut-off yield in the auction at 7.16% for its 6-year loan, whereas long-term papers issued by states like Kerala, Odisha, and Jammu & Kashmir crossed the 7.66% threshold.

Complete Breakdown of State Bond Cut-Off Yields

The auction results detailed the cut-off yields for fresh state loans as well as re-issuances of previously floated securities:

• Odisha: Cut-off yield set at 7.16% on a 6-year loan, and 7.6669% on the re-issue of the 7.70% SGS 2044 paper (originally issued July 22, 2026).

• Delhi: Re-issue of 7.31% SGS 2033 set at 7.3308%, and 7.75% SGS 2041 priced at 7.6368%.

• Madhya Pradesh: 22-year loan cut-off settled at 7.66%, re-issue of 7.39% SGS 2034 priced at 7.4207%, and re-issue of 7.58% SGS 2038 set at 7.5904%.

• Uttar Pradesh: Re-issue of 7.74% SGS 2038 cleared at 7.5899%, while 7.82% SGS 2046 settled at 7.6581%.

• Telangana: Re-issue of 7.70% SGS 2037 cleared at 7.5774%, with the ultra-long 7.65% SGS 2055 set at 7.6574%.

• Kerala: Re-issue of 7.86% SGS 2042 cleared at 7.6786%, and 7.83% SGS 2049 settled at 7.6580%.

• West Bengal: Re-issue of 7.58% SGS 2035 cleared at 7.6005%, while 7.71% SGS 2047 paper yielded 7.6666%.

• Bihar: Re-issue of 7.66% SGS 2041 priced at 7.6499%, and 7.71% SGS 2044 cut-off settled at 7.6594%.

• Assam: Re-issue of 7.56% SGS 2036 settled at 7.5950%.

• Uttarakhand: Re-issue of 7.70% SGS 2048 priced at 7.6574%.

• Jammu and Kashmir: Re-issue of 7.91% SGS 2046 cleared at 7.6666%.

• Mizoram: Cut-off yield on new state loan set at 7.63%.

Official Sources Section

The borrowing figures and cut-off yields were published directly by the Reserve Bank of India under its scheduled market borrowing programme for state governments, coordinated with the Ministry of Finance.

Quote Section

"According to officials at the Reserve Bank of India, the state borrowing operation concluded in line with the indicative calendar, reflecting smooth absorption of sub-sovereign debt by institutional participants."

Why It Matters

State Development Loans are the primary instrument used by Indian state governments to fund capital expenditure, infrastructure projects, and fiscal deficit requirements.

For fixed-income investors, mutual funds, insurance firms, and pension managers, the stable cut-off yields confirm that sovereign debt spreads remain orderly. For retail investors participating via the RBI Retail Direct scheme, long-term state papers offer safe sovereign-backed yields exceeding 7.60%.

Key Facts at a Glance

• Total Borrowing: 12 Indian states successfully raised ₹202 billion ($2.42 billion).

• Yield Range: Cut-off yields settled between 7.16% (Odisha 6-year loan) and 7.6786% (Kerala 2042 paper).

• Target Achievement: 100% of the notified ₹202 billion amount was absorbed without devolvement.

• Maturity Spectrum: Tenors spanned from 6-year short loans to ultra-long 2055 paper.

Frequently Asked Questions

What are State Government Securities (SGS)?

State Government Securities, often called State Development Loans (SDLs), are dated debt securities issued by state governments through RBI auctions to fund public spending and infrastructure.

Who manages the auction of state government bonds in India?

The Reserve Bank of India (RBI) acts as the public debt manager for both the Central and State Governments, conducting competitive and non-competitive bidding on its electronic platform.

Why do yields differ across states and tenors?

Yields vary depending on the maturity period of the bond, market liquidity, prevailing benchmark interest rates, and institutional appetite for specific tenors.

Source: Reserve Bank of India, Ministry of Finance