Nine states raise ₹15,560 cr at weekly auction, lower than notified amount

After Maharashtra last week, Tamil Nadu rejects bids for 15-year paper

Nine states raised ₹15,560 crore at the weekly bond auction on Tuesday, lower than the notified amount of ₹16,560 crore.

 

Tamil Nadu did not accept any bids for its 15-year bond. Last week, Maharashtra had rejected all bids for the re-issue of its 2050 and 2055 bonds, each worth ₹1,000 crore.

 

The borrowed amount was significantly less than ₹25,960 crore indicated in the borrowing calendar.

 

In the third quarter of 2025-26, states have indicated plans to raise ₹2.82 trillion through market borrowings, of which they have so far raised ₹84,170 crore.

 

In the second quarter, states had indicated borrowings of ₹2.87 trillion but eventually raised ₹3 trillion.

 

No state issued 10-year securities this week. Only Uttar Pradesh raised funds through an 11-year paper, which settled at a yield of 7.24 per cent compared with a 7.14 per cent yield on Tamil Nadu’s 10-year paper last week.

 

Meanwhile, the 10-year government yield, which had risen towards the end of October and early November 2025, has since eased to 6.49 per cent. The yield spread between SDLs and the 10-year G-Sec narrowed to 61 basis points last week, from 69 basis points at the end of the previous month.

 

“State-wise data shows that Madhya Pradesh, Telangana, Bihar, Gujarat and Uttar Pradesh have substantially increased their borrowing program this year. In contrast, states like Andhra Pradesh, J&K, Punjab, and Karnataka have reduced their reliance on market borrowings so far in FYTD26,” said Madan Sabnavis, chief economist, Bank of Baroda.

 

States primarily borrowed through long-term securities this week, with yields at the ultra-long end of the curve easing slightly compared with last week.

 

“Both the amount and tenure were reduced in the current quarter,” said a dealer at a state-owned bank.

 

“We expect that states will end up borrowing less than the indicated amount in this quarter,” he added.

 

Cumulatively, in FYTD26 from April 3 to November 11, 2025, states have borrowed ₹5.85 trillion, accounting for 69.5 per cent of the planned amount till Q3. This is significantly higher than ₹4.85 trillion borrowed during the same period last year.