RBI Raises ₹17,000 Crore in State Government Securities Auction Amid Strong Investor Demand

Image Source: Business Standard

The Reserve Bank of India (RBI) successfully concluded a State Government Securities (SGS) auction on October 20, 2025, raising ₹17,000 crore across multiple states. Eleven securities were issued with tenors ranging from 7 to 26 years. The auction saw robust investor interest, receiving bids worth nearly ₹70,000 crore.

Investor Appetite Soars: RBI’s ₹17,000 Crore State Bond Auction Sees Overwhelming Response

The Reserve Bank of India (RBI) has announced the results of its latest State Government Securities (SGS) auction, held on October 20, 2025, raising a total of ₹17,000 crore. The auction, conducted on behalf of various state governments, reflects strong investor confidence in state-backed debt instruments amid a stable interest rate environment.

Key Highlights from the Auction:

Total Bids and Allotments

The auction attracted 780 competitive bids totaling ₹69,599.48 crore, more than four times the notified amount.

Of these, ₹16,607.85 crore were accepted under competitive bidding.

An additional ₹392.15 crore was allotted through non-competitive bidding, bringing the total to ₹17,000 crore.

Participating States and Issuances

Eleven securities were issued by states including Chhattisgarh, Maharashtra, Rajasthan, Tamil Nadu, and Uttar Pradesh.

Chhattisgarh raised ₹2,000 crore through two tranches of ₹1,000 crore each, with tenors of 11 years (2032) and 15 years (2040).

Tenor and Yield Range

The securities were issued for tenors ranging from 7 to 26 years, catering to both medium- and long-term investors.

Cut-off yields ranged between 6.99% and 7.36%, reflecting prevailing market rates and state-specific credit profiles.

Re-issuance Strategy

Some bonds, such as Chhattisgarh’s 7.14% SGS 2032, were re-issues of earlier bonds, allowing for better liquidity and price discovery in the secondary market.

Market Implications

The strong demand underscores investor appetite for stable, government-backed instruments, especially amid global economic uncertainty.

Analysts view this as a positive signal for state fiscal health and debt market depth.

This auction is part of the RBI’s ongoing efforts to facilitate state-level borrowing in a transparent and efficient manner, supporting infrastructure and welfare spending across India.

Sources: MSN News, The Hindu Business Line, Tax Publishers

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