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Seven Indian states collectively raised INR 13,300 crore through the latest auction of State Government Securities (SGS). All participating states accepted their full notified amounts, indicating strong investor demand. Madhya Pradesh led fundraising with INR 4,800 crore and offered the highest yields (7.14-7.15%). Maharashtra raised INR 4,000 crore, while Bihar secured INR 2,000 crore at the lowest yield (6.88%). This auction, conducted by the RBI, helps states fund infrastructure and development projects, aligning with their capital expenditure and fiscal needs.
Seven major Indian states recently raised a significant amount of capital in the latest round of auction for government securities. This event, according to data released by Reserve Bank of India (RBI), saw funds raised across various regions of India to meet capital expenditure and fiscal needs. The states utilized the sale of State Government Securities (SGS) for this purpose. Advertisement
The seven states collectively raised a total of INR 13,300 crore. All participating states accepted the full amount they had sought for the auction, indicating that investor demand remained strong across different maturities. This also means no states faced under-subscription in this round. The RBI conducted this yield-based auction as part of its regular borrowing calendar for states.
Madhya Pradesh led the fundraising effort, mobilizing INR 4,800 crore through two different securities. The state offered the highest yields in this auction, providing 7.14% on a 16-year security and 7.15% on an 18-year security. Following Madhya Pradesh, Maharashtra successfully raised INR 4,000 crore. This state floated two securities with 20-year and 21-year tenors, both offering a yield of 7.14%. Bihar, on the other hand, raised INR 2,000 crore at the lowest yield in this round of auction. The state offered a 10-year security at 6.88%, which was the most economical in terms of interest cost.
Other participants in the auction included Haryana, which raised INR 1,000 crore with a 16-year bond at a cut-off yield of 7.12%. Jammu and Kashmir and Mizoram both offered 15-year bonds with yields of 7.14%, raising INR 400 crore and INR 100 crore respectively. Telangana issued a 30-year bond, raising INR 1,000 crore at a yield of 7.13%. This marked the longest maturity period among all the issuances in this auction. Auctions of State Government Securities are a way for states to fund infrastructure and development projects, while also maintaining fiscal discipline under the broader macroeconomic framework set by the central bank.
Source- ANI
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