Nine state govts, one Union Territory raise Rs 189 billion at bond auction

Cut-off yield highest in FY24 so far

Nine state governments and one Union Territory (UT) raised Rs 18,900 billion through state government securities (SGS), about 72 per cent above the amount indicated for this week in the auction calendar for Q3 FY24.

Maharashtra raised an amount of Rs 4,000 crore through the re-issue of 10-year paper (Rs 2,000 crore) at a cut-off yield of 7.69 per cent and an 11-year bond (Rs 2,000 crore) at a cut-off yield of 7.71 per cent, according to Reserve Bank of India data.

Another large state, Tamil Nadu, raised Rs 4,000 crore via a 10-year paper (Rs 2,000 crore) with a cut-off yield of 7.72 per cent and a 20-year bond (Rs 2,000 crore) at a cut-off yield of 7.66 per cent.

The Union Territory of Jammu and Kashmir raised Rs 300 crore through a 30-year paper with a cut-off yield of 7.60 per cent.

Meanwhile, the weighted average cut-off of the SGS jumped to 7.69 per cent on October 23, 2023, the highest so far in FY24, from 7.65 per cent last week. This was despite the decline in the weighted average tenor to 12 years from 14 years, rating agency ICRA said.

The spread between the cut-off of the 10-year SGS and the 10-year Government of India bond (7.18 per cent GS 2033) yield was stable at 33 basis points on October 23, 2023, from last week, the agency added.