RBI to Auction ₹272 Billion in State Government Securities for 9 States on June 24

India’s bond market is set for a major event as the Reserve Bank of India (RBI) has announced that nine states will raise a combined ₹272 billion through the auction of state government securities (SGS) on June 24, 2025. The auction will offer a diverse set of maturities, ranging from 3 years to as long as 30 years, giving investors a wide choice of investment horizons.

 

Key Highlights:

 

States and Structure: Nine states are participating in this round, issuing loans with maturities of 3, 10, 11, 12, 13, 14, 15, 18, 21, 25, 26, 27, and 30 years. This mix allows both short-term and long-term investors to participate, and helps states manage their debt profiles efficiently.

 

Auction Mechanism: The auction will be conducted via the RBI’s electronic platform, E-Kuber. Both competitive and non-competitive bids are accepted, with a portion of the notified amount reserved for retail and institutional investors under the non-competitive bidding facility. Successful bidders will be allotted bonds in minimum denominations of ₹10,000, with interest paid semi-annually.

 

Purpose and Impact: These state government securities are crucial for funding state-level infrastructure, welfare, and development projects. The proceeds will support ongoing capital expenditure and fiscal management, while providing a safe, SLR-eligible investment avenue for banks and other institutions.

 

Market Context: The auction comes at a time of robust credit growth and strong demand for government securities, aided by recent RBI rate cuts and ample liquidity in the system. The move also follows the RBI’s broader strategy to deepen the government securities market, including the recent introduction of STRIPS (separate trading of interest and principal) for state bonds, enhancing liquidity and flexibility for investors.

 

This ₹272 billion auction is part of the regular borrowing calendar and reflects both the growing needs of Indian states and the evolving sophistication of India’s domestic bond market.

 

Sources: RBI, Times of India, Business Standard, Economic Times, ET Now