States Tap Bond Market But Fall Short Of Target

The shortfall in borrowings reflects cautious fiscal planning amid rising yields. Several states accepted partial amounts, while others like Assam and Gujarat opted out of select tenures, indicating selective demand and cost sensitivity in the bond market.  

Auction Outcomes  
Tamil Nadu accepted partial bids in reissues of 7.52% and 7.58% SGS, while Uttar Pradesh took partial amounts in its 30-year security. Rajasthan’s 12-year loan was cut off at 7.87%, and Tripura’s 17-year and 20-year loans saw yields above 8%.  

Yield Trends  
Cut-off yields ranged from 7.38% for Haryana’s 5-year loan to over 8.09% for Uttar Pradesh’s 30-year bond. West Bengal’s long-tenure securities also crossed the 8% mark, reflecting rising cost of funds for states.  

Market Sentiment  
The mixed acceptance and high yields suggest tightening liquidity and cautious investor sentiment. States are balancing fiscal needs with borrowing costs, while RBI’s auction data offers transparency on sovereign debt pricing.  

Bond Market Snapshot  

• States raised ₹399.92 billion, below ₹429.41 billion target  
• Tamil Nadu, Uttar Pradesh, Uttarakhand accepted partial bids  
• Assam and Gujarat did not accept bids in select tenures  
• Cut-off yields ranged from 7.38% to 8.09%  
• RBI released detailed auction data across multiple SGS reissues  

Sources: RBI Auction Data, Economic Times, Business Standard, Mint