Market Borrowings

The yield on 30-year British gilts rose sharply on Tuesday and again on Wednesday, outpacing increases for other governments' bonds and hitting its highest since August 1998 at 5.383 per cent

Sales in the fiscal year starting April 1, 2025, are likely to be higher on redemption of debt issued during the Covid years

Amount, which is 47% of gross borrowing target, will be realised via 21 weekly auctions

State governments raise funds from the market to meet budgetary requirements by floating government securities (G-sec) and bonds bearing different maturities

The yield on the benchmark 10-year government bond declined by 12 basis points (bps) in 2024 from 7.17 per cent to 7.05 per cent on February 1, 2024

The union territory of Jammu and Kashmir (J&K) raised Rs 1,100 crore by issuing paper with the longest tenure of 30 years

Government will also issue Treasury bills worth Rs 3.12 trillion in the third quarter of 2023-24. Each of these weekly T-bill auctions will be to the tune of Rs 24,000 crore

Aditi Nayar, chief economist, ICRA, said the indicative borrowing amount for Q3FY24 is broadly along expected lines

To borrow Rs 6.55 trillion in second half

The government on Tuesday said it will borrow Rs 6.55 lakh crore in the second half of 2023-24 through dated securities, including Rs 20,000 crore through issuance of Sovereign Green Bonds (SGrBs). The government meets its fiscal deficit mainly through market borrowings. The government had projected gross market borrowing of Rs 15.43 lakh crore for 2023-24. "...the Government of India has decided to borrow the balance amount of Rs 6.55 lakh crore (42.45 per cent of Rs 15.43 lakh crore) in the second half of the fiscal year 2023-24 through dated securities, including Rs 20,000 crore through issuance of Sovereign Green Bonds (SGrBs)," the finance ministry said in a statement. "Responding to market demand for longer duration securities, 50-year security will be issued for the first time," it added. The gross market borrowing of Rs 6.55 lakh crore will be completed through 20 weekly auctions. The market borrowing will be spread over 3, 5, 7, 10, 14, 30, 40 and 50-year securities. The

Sebi removes penalty, introduces incentives

India aims to borrow a gross Rs 15.43 trillion via a sale of bonds this financial year. About 42% of that is due to be borrowed in October-March

Market borrowings by India's state governments are likely to be lower than the amounts indicated in their budgets, as off-balance sheet liabilities will continue to be adjusted in this fiscal year

Despite near 60 per cent more supplies, the states continued to pay more for their market borrowing with the average bond pricing rising by 7 basis points to a multi-week high of 7.68 per cent at the weekly auction on Tuesday. For the past many weeks, the yields were more or less stagnant and so was the debt-raising. Fourteen states raised a record-high Rs 32,800 crore from the market by issuing state government securities (SGS), which is a sharp 59 per cent higher than the year-ago level, even though the amount is 8 per cent lower than indicated in the auction calendar, Aditi Nayar, the chief economist & head of research at Icra Ratings said in a review note. She said the 7 bps rise in the weighted average cut-off to 7.68 per cent is due to the concerns related to monetary tightening as latest inflation numbers surprised on the downside. However, despite the all-time high borrowing and a mild increase in the weighted average tenor to 16 years from 15 years, the spread between the

Green bonds can help lower borrowing cost

Nevertheless, as a proportion of GDP, fiscal deficit is expected to ease to 5.8 per cent from 6.4 per cent

After rising steeply for a month, the cost of market borrowing for states declined sharply on Tuesday with the weighted average cut-off falling by 11 basis points to 7.72 per cent from 7.83 per cent last week. The cost declined despite a rise in the weighted average tenor to 12 years from 11 years last week, according to an analysis by Icra Ratings. Nine states raised Rs 16,900 crore through state government securities (SGS) on Tuesday -- 10 per cent lower than the Rs 18,700 crore indicated for this week in the third quarter auction calendar. So far this year, bond sales by states are down 8 per cent over the year-ago period. The weighted average cut-off of states eased by 11 bps (basis points) to 7.72 per cent despite a rise in weighted average tenor to 12 years from 11 years and the 10-year benchmark G-sec yield remaining stable at 7.43 per cent in the auction on this Tuesday from last Tuesday. The weighted average cut-off of 10-year state bonds also declined by 10 bps to 7.73 pe

The average cost of market borrowing for states rose 12 basis point to 7.77 per cent on Monday, increasing for the third consecutive week. The cost of funds has seen a cumulative hike of 31 basis points (bps) during the past three weeks. At the latest auction of debt, 10 states raised Rs 19,500 crore on Monday, drawing down the full amount indicated for this week. The weighted average cut-off of the debt rose by 12 bps to 7.77 per cent from 7.65 per cent in the last auction, despite the weighted average tenor declining to 13 years from 15 years, Aditi Nayar, chief economist at Icra Ratings, said in a note. Before the yields began to climb three weeks ago, for four successive weeks the rates had been falling and had touched a low of 7.46 per cent. She attributed the spike in the cut-off to the rise in US treasury yields and the hike in the 50 bps repo rate by the RBI last Friday. Reflecting the hardening interest rate regime, the 10-year G-secs (Government Securities) yield increas

According to the Reliance Retail's annual reports, the company will seek shareholders' approval in the September 30 annual general meeting

This will be done by giving them infrastructure status, at par with sectors to improve access to finance and enable long-term borrowing from lenders at easier terms