Twelve Indian states collectively raised Rs 26,750 crore through a yield-based auction of state government securities (SGS) held by the Reserve Bank of India (RBI) on 5 August 2025. The auction saw broad participation across tenors, reflecting active demand from investors despite varying yield levels across states and maturities.
Among the major issuers, Maharashtra secured Rs 4,000 crore across four tranches, including re-issues of its 2045 and 2046 securities carrying a 7.14% coupon.
Tamil Nadu raised Rs 3,000 crore, with tenors ranging from 4 to 30 years. It raised Rs 1,000 crore via a four-year bond at a 6.27% yield. The state also saw re-issues: Rs 1,000 crore of the 6.82% Tamil Nadu SGS 2035, issued at a price of 99.61 and yielding 6.874%, and Rs 1,000 crore of the 7.07% SGS 2055 re-issued at 99.02 for a 7.1495% yield.
Telangana also tapped the market for Rs 5,000 crore with multiple bonds maturing between 19 and 24 years, at yields hovering around 7.19%-7.21%. Meghalaya raised Rs 300 crore for a ten-year security at a yield of 7%, while Mizoram raised Rs 100 crore for a fifteen-year bond at 7.26% yield.
Other key participants included Andhra Pradesh and Madhya Pradesh, which raised Rs 5,000 crore and Rs 4,000 crore respectively. Kerala issued a sixteen-year bond, raising Rs 1,000 crore at a 7.24% yield, while Bihar accepted Rs 2,000 crore for a fifteen-year security at 7.22% yield. Rajasthan garnered Rs 1,000 crore through a twenty-seven-year security at a 7.17% yield.
Jammu & Kashmir saw a partial acceptance of its six-year bond, raising Rs 450.02 crore against a notified amount of Rs 800 crore, indicating selective investor interest at the offered yield of 6.84%.
In total, 12 states participated in the auction, issuing bonds with maturities from 4 to 30 years. The yields ranged from a low of 6.27% for Tamil Nadu’s four-year paper to a high of 7.26% for Mizoram’s 15-year bond, reflecting the risk and duration premiums attached to individual state papers.
The auction results signal continued reliance of states on the bond market for meeting fiscal needs, even as the RBI maintains a cautious policy stance amid inflationary pressures and evolving global cues.