Nine states successfully raised ₹20,461 crore through the sale of state development loans (SDLs) on Tuesday, marking an increase from the ₹14,800 crore mobilised in the previous week's auction. However, the amount fell short of the ₹23,000 crore indicated in the borrowing calendar, as reported by Business Standard. The auction covered both short- and long-term maturities, with borrowing activity spanning various tenors across participating states.
Market participants attributed the yield support to the recent decline in government bond yields, with the benchmark 10-year government security yield easing by around 5 basis points since last week's auction. According to Business Standard, the yield fell to 6.86 per cent from 6.91 per cent on June 9. Assam emerged as the only state to issue a 10-year paper, raising funds at a cut-off yield of 7.66 per cent, compared to Tamil Nadu's reissued 10-year security at 7.63 per cent in the previous week.
At the longer end of the curve, Jammu & Kashmir reissued a 25-year security at a cut-off yield of 7.80 per cent, maintaining the same level as Bihar's similar maturity in the previous auction. Among shorter-tenor papers, Andhra Pradesh raised funds through a six-year security at 7.28 per cent, while Punjab's seven-year paper was priced at 7.55 per cent. Telangana reissued a seven-year security at 7.44 per cent, unchanged from Tamil Nadu's level in the previous auction, as reported by Business Standard.
According to the indicative borrowing calendar, states plan to raise ₹2.55 trillion in the first quarter of FY27, representing a decrease from the ₹2.74 trillion planned for the corresponding period of the previous financial year. As reported by Business Standard, states have completed around 73 per cent of their planned first-quarter borrowing by June 16. Andhra Pradesh, Maharashtra, Rajasthan, Telangana and Uttar Pradesh accounted for nearly 57 per cent of total market borrowings during the quarter so far, while Tamil Nadu, Punjab and Gujarat have borrowed less from the market compared with the corresponding period last year.
