6 states, 1 UT raise Rs 12,500 cr at bond auction, 16% more than indicated

The market borrowings by state governments and union territories (UTs) remained higher than indicated for the fourth week in a row. The six states and one UT mopped up Rs 12,500 crore at a bond auction today, higher than the amount of Rs 10,800 crore indicated for this week in the Q3 FY2024 auction calendar, according to ICRA.

At the auction, Uttar Pradesh raised Rs 5,000 crore – Rs 2,500 crore through 11-year bonds with a cut-off yield of 7.73 per cent and Rs 2,500 crore via 12-year paper at a cut-off yield of 7.73 per cent. Maharashtra raised Rs 4,000 crore, out of which Rs 2,000 crore via 10-year bonds at 7.70 per cent and Rs 2,000 crore through 11-year bonds at 7.70 per cent. Telangana raised Rs 1,000 crore through a 17-year bond at 7.73 per cent, according to Reserve Bank of India data.

The union territory of Jammu and Kashmir (J&K) raised Rs 1,100 crore by issuing paper with the longest tenure of 30 years. The cut-off yield for J&K’s paper was 7.60 per cent. Goa raised a total of Rs 100 crore through 10-year bonds with a cut-off yield of 7.70 per cent.

The weighted average cut-off yield remained unchanged at 7.71 per cent for state government securities this week, as was the case at the auction last week. However, the spread between the cut-off yield for 10-year state bonds and 10-year Government of India paper shrunk to 42 basis points on November 13, 2023, from 43 bps last week, ICRA data showed.