Twelve Indian states and union territories collectively raised Rs 26,900 crore through a yield-based auction of state government securities held on 15 July 2025, as per data released by the Reserve Bank of India. The auction saw full subscription across all participating states, with cut-off yields ranging from 6.13% to 7.19%, reflecting steady investor interest across various tenors.
Maharashtra emerged as the largest borrower, mobilizing a total of Rs 6,000 crore through four separate issuances of Rs 1,500 crore each. The state tapped long-dated bonds ranging from 22 to 25 years, with cut-off yields progressively increasing from 7.12% to 7.16%, suggesting investors demanded a premium for longer duration exposure.
Uttar Pradesh raised Rs 3,000 crore through an 8-year security, priced at 6.86%, making it one of the more affordable tenors in terms of cost of borrowing.
Punjab followed with a Rs 2,500 crore issuance via a 24-year bond, which attracted the highest cut-off yield of the auction at 7.19%, possibly reflecting both duration and state-specific risk.
Andhra Pradesh tapped the market twice, raising Rs 1,500 crore via an 8-year bond at 6.87% and another Rs 2,100 crore through a 9-year bond at 6.88%, totaling Rs 3,600 crore in borrowings.
Bihar mobilized Rs 2,000 crore through a 10-year bond at a cut-off yield of 6.90%, while Gujarat raised the same amount via a 9-year security at a slightly lower 6.80%, marking one of the most cost-efficient issuances in this round.
Odisha diversified its approach with two bonds -- a Rs 500 crore issue maturing in just 3 years at 6.13%, the lowest yield in the auction, and a Rs 1,000 crore 12-year bond at 6.98%.
West Bengal fetched Rs 2,000 crore with a 12-year bond at a yield of 7.07%, while Jammu and Kashmir raised Rs 700 crore via a 20-year security priced at 7.18%, the second highest in the auction after Punjab.
Tamil Nadu tapped the market for Rs 1,000 crore through a 10-year bond, which cleared at 6.82%. Meanwhile, Goa raised a modest Rs 100 crore through a 10-year bond at 6.89%.
Telangana stood out for tapping ultra-long-term debt, raising Rs 2,500 crore across three bonds maturing in 32, 35, and 38 years. The cut-off yields for these securities were clustered around 7.09% to 7.10%, underscoring continued investor appetite for duration, albeit at a moderate premium.
The overall weighted average cut-off yield across all issuances stood at 6.99%. With full acceptance of notified amounts and a broad spread of maturities, the auction reflects a healthy appetite among investors for state government securities amid a stable interest rate environment.