Seven Indian States to Raise 167.5 Billion Rupees in Bond Auction
Seven Indian state governments will raise a combined 16,750 crore rupees through a central bank auction on September 22. Maharashtra leads the borrowing with a 5,000 crore rupee allocation. The auction includes competitive and non-competitive bidding options for investors.
Seven Indian state governments will raise a combined 16,750 crore rupees through a central bank auction on September 22. The Reserve Bank of India announced the plan on Friday, September 18. This transaction represents a significant debt issuance for regional fiscal needs.
Maharashtra will lead the borrowing with an allocation of 5,000 crore rupees. Rajasthan follows with 4,400 crore rupees. Andhra Pradesh has proposed raising 2,600 crore rupees through the same process.
State allocations and maturity details
Gujarat and Punjab will each raise 2,000 crore rupees. Jammu and Kashmir has proposed borrowings of 600 crore rupees. Goa will raise 150 crore rupees through a new 15-year security.
Maharashtra will issue securities maturing in 2031, 2039, and 2049. The coupon rates for these instruments are fixed at 7.09 percent, 7.63 percent, and 7.70 percent respectively. Rajasthan will re-issue securities maturing in 2044 and 2053, allocating 2,200 crore rupees to each tranche.
Andhra Pradesh will raise funds through maturities in 2039 and 2051. Gujarat will split its borrowing equally between 2036 and 2041 maturities. Punjab will issue fresh five-year and 15-year securities to meet its 2,000 crore rupee target.
Retail access and bidding rules
Retail investors can participate through the RBI Retail Direct portal. The minimum investment amount is 10,000 rupees. Additional investments must be in multiples of 10,000 rupees.
Up to 10 percent of the notified amount for each security is available to non-competitive bidders. These investors accept the weighted average yield from the competitive auction. A single non-competitive bid cannot exceed one percent of the total notified amount.
Auction mechanics and timeline
The auction will be conducted through the E-Kuber platform. Competitive bids must be submitted between 10:30 am and 11:30 am IST on September 22. Non-competitive bids are accepted between 10:30 am and 11:00 am IST.
The central bank determines the cutoff yield based on market conditions. Institutional investors submit competitive bids specifying the yield they are willing to accept. The RBI accepts bids starting from the lowest yield until the target amount is fully subscribed.
