States Borrow Rs 469.6 Billion As RBI Sets Cut-Offs

The auction results highlight the growing reliance of states on market borrowings to finance infrastructure, welfare, and development programs. The RBI’s cut-off data provides a snapshot of investor sentiment and the cost of debt across different maturities.  

Borrowing Trends  
Punjab’s 7.62% SGS 2032 was re-issued at 7.4995%, while Karnataka’s 7.31% SGS 2033 closed at 7.3289%. Tamil Nadu’s long-dated 7.63% SGS 2056 was re-issued at 7.6554%. Madhya Pradesh loans ranged from 7.45% for 10-year to 7.74% for 21-year maturities.  

Regional Variations  
Cut-offs varied across states, with Jammu and Kashmir at 7.79%, Kerala at 7.68%, and Mizoram at 7.74%. Gujarat accepted an additional Rs 5 billion each in 7-year, 6-month, and 11-year securities, signaling higher borrowing requirements.  

Key Highlights  

• States raised Rs 469.60 billion, above target  
• Punjab SGS 2032 cut-off at 7.4995%  
• Karnataka SGS 2033 cut-off at 7.3289%  
• Tamil Nadu SGS 2056 re-issued at 7.6554%  
• Madhya Pradesh loans ranged 7.45%–7.74%  
• Jammu and Kashmir cut-off highest at 7.79%  
• Gujarat accepted additional Rs 5 billion in securities  

Future Outlook  
Analysts expect borrowing costs to remain elevated as states continue tapping markets for funding. The RBI’s auction cut-offs highlight investor caution amid global interest rate trends and domestic fiscal challenges.  

Sources: Economic Times, Business Standard, Mint, Reuters, Hindustan Times