RBI conducts Rs 8,450 crore state government securities auction; cut-off yields between 6.43% and 7.43%

According to the RBI release, Bihar mobilised the highest notified amount in the auction with a Rs 2,000 crore issue carrying a cut-off yield of 7.43 per cent for a 30-year tenor. Telangana followed with a Rs 1,000 crore borrowing for a 35-year tenor at a cut-off yield of 7.33 per cent.

Goa raised Rs 100 crore at a yield of 7.12 per cent for an 11-year tenor, while Jammu and Kashmir garnered Rs 350 crore at a yield of 7.35 per cent for 15 years.

Haryana's Rs 1,000 crore issue was a re-issue of the 8.62 per cent Haryana SDL 2028 bond, originally floated on September 3, 2018, and fetched a cut-off price of Rs 105.96, translating to a yield of 6.4377 per cent.

Maharashtra accounted for the bulk of re-issues in the auction, cumulatively raising Rs 4,000 crore through four separate tranches.

These included, Rs 1,000 crore of 7.14 per cent SGS 2045, re-issued at Rs 98.07 with a yield of 7.3248 per cent.

Second was of Rs 1,000 crore of 7.14 per cent SGS 2046, re-issued at Rs 98.11 with a yield of 7.3170 per cent.

Third auction of Rs 1,000 crore of 7.17 per cent SGS 2054, re-issued at Rs 97.07 with a yield of 7.4171 per cent.

While last Rs 1,000 crore of 7.16 per cent SGS 2055, re-issued at Rs 96.92 with a yield of 7.4173 per cent.

The RBI release suggests that the notified amounts for all states and UTs in the auction were fully accepted, reflecting robust demand from the market participants.

State Development Loans (SDLs), are issued by the State Governments to fund their fiscal deficit. Each state can borrow up to a set limit. These securities carry similar risk profiles to central government securities but generally offer higher yields, making them more attractive to institutional investors seeking better returns.

The RBI, acting as the debt manager for state governments, conducts these auctions under its regular borrowing calendar. (ANI)