Indian States Raise Rs 394.50 Billion Via Loans As RBI Announces Cut-Off Yields

India’s state governments mobilized Rs 394.50 billion through loans in the latest auction, exceeding the planned Rs 379 billion. The Reserve Bank of India (RBI) released cut-off yields for various maturities, reflecting investor demand and borrowing costs across states.  

Madhya Pradesh recorded cut-off yields of 7.34% for its 8-year loan, 7.62% for its 13-year loan, and 7.72% for both 19-year and 23-year loans. Gujarat accepted an additional Rs 5 billion in its 5-year 6-month security, while Karnataka’s re-issues saw yields ranging from 7.10% to 7.49%.  

Other states also witnessed notable cut-offs, including West Bengal at 7.74% for its 18-year and 22-year loans, Kerala at 7.66%, Tripura at 7.78%, and Uttarakhand at 7.58%. Haryana’s 16-year and 19-year loans were cut off at 7.69% and 7.73% respectively. Maharashtra’s re-issues ranged between 6.79% and 7.35%, while Assam’s 20-year loan stood at 7.76%.  

Key highlights from the announcement include  

• Fourteen states raised Rs 394.50 billion, above target of Rs 379 billion  
• Madhya Pradesh cut-off yields ranged between 7.34% and 7.72%  
• West Bengal loans cut off at 7.74% for 18-year and 22-year maturities  
• Kerala, Tripura, and Uttarakhand yields between 7.58% and 7.78%  
• Karnataka re-issues recorded yields from 7.10% to 7.49%  
• Maharashtra and Assam re-issues cut off between 6.79% and 7.76%  

Analysts note that the higher-than-targeted borrowing reflects strong funding requirements by states, while yields indicate investor appetite amid evolving interest rate dynamics.  

Sources: Reserve Bank of India, Economic Times, Business Standard, Reuters