Ahead of budget, 13 states raise Rs 25,800 cr in debt capital from markets

In the second-highest auction so far in FY23, 13 states raised Rs 25,800 crore in debt capital from markets on Tuesday, paying a higher price as the cost rose by 4 basis points to 7.68 per cent.

The latest auction is 9 per cent higher on-year basis but was 19 per cent lower than indicated for this week in the auction calendar, according to a note by Icra Ratings.

The weighted average cut-off or the interest rate payable annually by the states, rose by a further 4 basis points to 7.68 per cent over the past auction, Icra Ratings chief economist and head of research & outreach Aditi Nayar said in the note.

She said while the weighted average tenor rose to 15 years from 13, the yield curve was inverted at the longer-end. Accordingly, the spread between the 10-year state bonds also called state development loans and the benchmark G-sec (Government Securities) yield rose to 33 basis points from 30 basis points last week.