Business Standard

State govt mkt borrowings up 8% YoY to Rs 7.6 trn with last auction of FY23

14 states, one UT raise Rs 41,200 cr, amount is 67% higher than that indicated for State Government Securities (SGS) for this week in the Q4FY23 auction calendar

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Abhijit Lele Mumbai

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In some hectic year-end fund raising activity, 14 state governments and one union territory raised Rs 41,200 crore in the last bond auction of current financial year (FY23). The amount was 67 per cent beyond that indicated for State Government Securities (SGS) for this week.

The weighted average tenure of the borrowings also rose to 16 years from 14, while the weighted average cut-off of the SGS rose by seven basis points (bps) to 7.81 per cent on Tuesday from 7.74 per cent in the last auction. The spread between the 10-year SGS and (7.26 GS 2033) yield rose to 47 bps today from 43 bps last week, according to rating agency Icra.

Moreover, the total SGS issuance in FY23, at Rs 7.6 trillion, was eight per cent higher than the year-ago level (Rs 7 trillion).

According to Reserve Bank of India data, Rajasthan raised the highest amount of Rs 6,262 crore through three bonds.

For 10-year paper, RBI said in a statement that Gujarat and Tamil Nadu did not accept any amount though they had indicated they would raise Rs 500 crore and Rs 2,000 crore, respectively, through benchmark paper. West Bengal accepted an additional amount of Rs 500 crore each in the 17-year and 19-year securities, RBI said.

Eight states and one UT (Chhattisgarh, Gujarat, Himachal Pradesh, Jammu & Kashmir, Kerala, Nagaland, Rajasthan and Sikkim) raised a substantial Rs 16,700 crore through SGS, even though they had not initially indicated their participation in today’s auction.

Additionally, the issuance of three states, namely Punjab, Uttar Pradesh (UP) and West Bengal (WB), was Rs 6,900 crore higher than the amount that they had indicated.

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First Published: Mar 28 2023 | 9:49 PM IST

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