Thirteen Indian states collectively raised Rs 297.25 billion through state development loans (SDLs), falling short of the targeted Rs 313.50 billion. The auction saw varied cut-off yields across maturities, with Bihar, West Bengal, Telangana, Tamil Nadu, and others accepting partial amounts, reflecting cautious borrowing strategies amid market conditions.
India’s state governments tapped the bond market this week, raising Rs 297.25 billion via SDLs, below the planned Rs 313.50 billion. The Reserve Bank of India (RBI) conducted the auction, which witnessed diverse cut-off yields across maturities, highlighting investor sentiment and state-level fiscal strategies. Several states accepted partial amounts, signaling calibrated borrowing amid evolving market dynamics.
Key highlights from the announcement include
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Bihar accepted Rs 9.10 billion in its 10-year security at a cut-off yield of 7.40 percent.
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West Bengal raised Rs 965.019 crore in its 12-year bond at 7.50 percent, while its 11-year bond cut-off stood at 7.86 percent.
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Telangana’s long-tenor bonds saw yields between 7.49 percent and 7.68 percent across 14 to 27 years.
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Tamil Nadu raised funds via multiple maturities, with yields ranging from 7.09 percent (7-year) to 7.52 percent (30-year).
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Maharashtra’s 15-year bond cut-off was 7.43 percent, while its 9-year bond stood at 7.20 percent.
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Madhya Pradesh accepted bonds across 8, 13, and 23 years, with yields between 7.20 percent and 7.54 percent.
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Andhra Pradesh’s bonds ranged from 7.35 percent (11-year) to 7.59 percent (19-year).
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Punjab and Rajasthan recorded cut-offs at 7.49 percent and 7.24 percent respectively, while Himachal Pradesh and Meghalaya stood at 6.75 percent and 7.44 percent.
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Gujarat’s 10-year bond cut-off was at 7.17 percent.
The auction results reflect cautious borrowing by states, balancing fiscal needs with prevailing market yields. Analysts note that while demand remains steady, higher yields indicate investor caution amid broader economic conditions.
Sources: RBI Auction Data, Economic Times, Business Standard, Moneycontrol