Ten Indian states collectively raised Rs 268.15 billion through State Development Loan (SDL) auctions, meeting their targeted borrowing. Cut-off yields ranged between 7.48% and 7.65%, reflecting investor caution amid fiscal pressures and stable demand. The auction highlights continued reliance on SDLs for financing state-level expenditures.
India’s central bank reported that ten states successfully tapped the bond market, raising Rs 268.15 billion in line with their scheduled borrowing program. The auction saw yields hover in the 7.5–7.65% range, underscoring the balance between investor appetite and fiscal needs.
Key highlights from the announcement include
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Uttarakhand’s 6.74% SDL 2035 carried an implicit yield of 7.5395%.
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Tamil Nadu’s 7.58% SDL 2056 was priced at 7.6113%, while its 7.50% SDL 2037 stood at 7.5403%.
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West Bengal bonds saw cut-offs at 7.59% (11-year), 7.64% (16-year), and 7.63% (20-year).
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Telangana’s 16-year and 26-year bonds were both cut off at 7.61%.
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Haryana’s 13-year and 17-year bonds were cut off at 7.60% and 7.61% respectively.
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Chhattisgarh’s 10-year and 11-year bonds were cut off at 7.54% and 7.56%.
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Bihar’s 18-year and 25-year bonds carried the highest cut-off at 7.65%.
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Punjab’s bonds were priced at 7.48%, the lowest among the group.
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Assam and Mizoram bonds also cut off at 7.65%.
The auction reflects steady demand for SDLs, though yields remain elevated as states continue to borrow heavily to fund infrastructure, welfare, and fiscal commitments. Analysts note that while investor participation remains strong, the higher yields signal cautious sentiment amid inflationary pressures and fiscal consolidation challenges.
Sources: BloombergQuint, Business Standard, Economic Times