Maharashtra leads the pack on SDL trading: Ind-Ra

Maharashtra, Andhra Pradesh, Tamil Nadu and Gujarat will emerge as preferred destinations for investment in state development loans (SDLs), India Ratings and Research (Ind-Ra) today said.
"We find Maharashtra SDLs rank the best among states when it comes to trading of bonds. Notwithstanding the size and frequency of their issuances, appetite for Maharashtra SDLs is strong," the rating agency said.
Bihar sits at the other end of the spectrum, where market activity is limited compared with other state bonds, it added.
SDLs are market borrowings by state governments. RBI co-ordinates the actual process of sale of these securities.
SDLs are treated more as a generic asset class, with investors making limited differentiation on the quality of states' performances.

Ind-Ra noted that pricing in the SDL market is likely to be less generic with the diversification and deepening of markets and focus more on both credit quality and liquidity of states.
The rating agency said it has arrived at state rankings based on the market activity of the top 15 issuer states.