{"id":361714,"date":"2025-09-26T10:30:51","date_gmt":"2025-09-26T05:00:51","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=361714"},"modified":"2025-09-26T10:33:05","modified_gmt":"2025-09-26T05:03:05","slug":"rbi-state-government-securities-auction-raises-25k-crore","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2025\/09\/26\/rbi-state-government-securities-auction-raises-25k-crore\/","title":{"rendered":"11 States Raise \u20b925,000 Crore via RBI Securities Auction"},"content":{"rendered":"<div style=\"text-align: justify; line-height: 150%;\">\n<p style=\"margin-bottom: 3%;\">On 19-9-2025, the <span style=\"font-weight: bold;\">Reserve Bank of India<\/span> (&#8216;RBI&#8217;) announced the auction of <span style=\"font-weight: bold;\">State Government Securities<\/span> (SGS), aimed at facilitating state-level fundraising through the sale of bonds to support long-term development, infrastructure, and fiscal planning. The auction was conducted on 23-09-2025.<\/p>\n<h3>Key points:<\/h3>\n<ol style=\"list-style-type: decimal;\">\n<li>\n<p>The auction saw participation from eleven state governments, each aiming to raise funds through a combination of new issuances and re-issues of existing securities.<\/p>\n<\/li>\n<li>\n<p>It was conducted via the RBI&#8217;s Core Banking Solution platform, <span style=\"font-weight: bold;\">E-Kuber<\/span>.<\/p>\n<\/li>\n<li>\n<p>The tenors ranged from 7 to 26 years, with both yield-based and price-based auctions depending on the nature of the securities.<\/p>\n<\/li>\n<li>\n<p>The SGS qualify as eligible investments for <span style=\"font-weight: bold;\">Statutory Liquidity Ratio<\/span> (&#8216;SLR&#8217;) and are permitted under the ready forward facility, making them attractive to banks, financial institutions, and retail investors.<\/p>\n<\/li>\n<li>\n<p>Non-competitive bids were also accepted, with retail and institutional investors participating through the <span style=\"font-weight: bold;\">RBI Retail Direct portal<\/span>. The minimum bid size was &#8377;10,000 and in multiples thereof.<\/p>\n<\/li>\n<li>\n<p>The RBI announced the auction results on 24-9-2025.<\/p>\n<\/li>\n<li>\n<p>The auction received strong interest, with 1,487 competitive bids totalling over &#8377;1.27 lakh crore.<\/p>\n<\/li>\n<li>\n<p><span style=\"font-weight: bold;\">Telangana<\/span> led the borrowing, raising &#8377;5,000 crore across four tranches (22&#8212;26 years) at a uniform yield of 7.44%.<\/p>\n<\/li>\n<li>\n<p><span style=\"font-weight: bold;\">Bihar<\/span> followed with &#8377;4,000 crore through 20- and 25-year securities at 7.45%.<\/p>\n<\/li>\n<li>\n<p><span style=\"font-weight: bold;\">Tamil Nadu<\/span> raised &#8377;4,000 crore via new and re-issued bonds, with yields between 7.02% and 7.26%, while <span style=\"font-weight: bold;\">Madhya Pradesh<\/span> secured &#8377;3,000 crore at 7.43% and 7.44% for 18- and 21-year tenors.<\/p>\n<\/li>\n<li>\n<p><span style=\"font-weight: bold;\">Maharashtra<\/span> raised &#8377;1,000 crore through an 11-year bond at 7.27% but declined bids for its re-issued 2045 and 2046 papers.<\/p>\n<\/li>\n<li>\n<p><span style=\"font-weight: bold;\">West Bengal<\/span> mobilized &#8377;2,500 crore, including &#8377;1,500 crore via a re-issue of its 2044 bond at 7.4489%, and &#8377;1,000 crore through a new 11-year bond at 7.42%<\/p>\n<\/li>\n<li>\n<p> Other states like Kerala, Gujarat, Rajasthan, Punjab, and Chhattisgarh also participated, each contributing through varied maturities and instruments.<\/p>\n<\/li>\n<li>\n<p><span style=\"font-weight: bold;\">Gujarat<\/span>&#8217;s 7-year bond cleared at 7.07%, <span style=\"font-weight: bold;\">Kerala<\/span>&#8217;s 25-year at 7.44%, <span style=\"font-weight: bold;\">Punjab<\/span>&#8217;s re-issued 2033 at 7.3886%, <span style=\"font-weight: bold;\">Rajasthan<\/span>&#8217;s 10-year at 7.32%, and <span style=\"font-weight: bold;\">Chhattisgarh<\/span>&#8217;s re-issued 2029 bond at &#8377;101.14 with a yield of 6.6691%.<\/p>\n<\/li>\n<li>\n<p>Overall, weighted average yields hovered around 7.4%, reflecting steady investor demand in an auction that raised the <span style=\"font-weight: bold;\">total allotment of &#8377;25,000 crore out of the &#8377;27,000 crore notified.<\/span><\/p>\n<\/li>\n<li>\n<p>The funds raised through <span style=\"font-weight: bold;\">SGS auctions<\/span> are primarily used by State Governments for:<\/p>\n<ul style=\"list-style-type: disc;\">\n<li>\n<p>Financing developmental and infrastructure projects<\/p>\n<\/li>\n<li>\n<p>Meeting fiscal deficits and budgetary requirements<\/p>\n<\/li>\n<li>\n<p>Managing day-to-day expenditures and public welfare schemes<\/p>\n<\/li>\n<li>\n<p>Servicing existing debt and refinancing maturing obligations<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p style=\"font-style: italic;\">RBI&#8217;s auction of State Government Securities presented a strong investment opportunity, with eleven states raising &#8377;25,000 crore to support long-term development, infrastructure, and fiscal needs.<\/p>\n","protected":false},"author":67525,"featured_media":361723,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[4,1193],"tags":[89862,89863,89860,69630,89861,89865,2611,89864,89858,89866,89857,89868],"class_list":["post-361714","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legislationupdates","category-notifications","tag-development-finance","tag-e-kuber","tag-fiscal-management","tag-indian-economy","tag-infrastructure-funding","tag-investor-demand","tag-RBI","tag-rbi-retail-direct","tag-sgs-auction","tag-slr-investment","tag-state-government-securities","tag-25000-crore"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - 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