 "Corporate debt, govt bonds improve returns of National Pension Scheme")
After borrowing a record Rs 50,206 crore on Tuesday, eighteen states plan to borrow Rs 60,032 crore at the weekly state bond auction on 26 March 2024. The notified amount was significantly higher than the calendar amount of Rs 29,399 crore.
Market participants said that the record supply at the last state bond auction for the current financial year was along the expected lines. The supply is expected to be absorbed given that there is no fresh supply of central government securities, said dealers.
“Market was expecting higher supply at the last auction, but it is not a worry as it will sail through like the last auction,” said a dealer at a state-owned bank. “There might be a slight rise in yields but there is demand for state bonds,” he added.
The cut-off yield on 10-year papers was set in the range of 7.44 per cent - 7.50 per cent on Tuesday, against 7.36 per cent - 7.41 per cent at the previous auction.
The yield on the benchmark 10-year government bond had also risen by three basis points on Tuesday due to the large supply at the state bond auction.
