13 States Raise Rs 19,692 Crore in State Government Securities Auction

Thirteen Indian states participated in a state government securities auction, collectively raising Rs 19,692 crore, slightly surpassing the notified amount of Rs 19,592 crore. This marked an increase from the previous week, where eight states had raised Rs 12,100 crore through a similar auction.

Top Performers – Karnataka and Uttar Pradesh

According to data from the Reserve Bank of India (RBI), Karnataka and Uttar Pradesh emerged as the leading states, each successfully raising Rs 4,000 crore.

Details of Karnataka’s Auction:

  • Karnataka raised Rs 4,000 crore through two papers.
  • Rs 2,000 crore was raised via a 15-year paper with a cut-off yield of 7.60%.
  • Another Rs 2,000 crore was generated through a 16-year paper with a cut-off yield of 7.64%.

Details of Uttar Pradesh’s Auction

  • Similar to Karnataka, Uttar Pradesh also raised Rs 4,000 crore through two papers.
  • Rs 2,000 crore came from a 10-year paper with a cut-off yield of 7.62%.
  • The remaining Rs 2,000 crore was obtained through an 11-year paper, also with a cut-off yield of 7.62%.

Changing Yield Trends

The cut-off yield on the 10-year state bond witnessed a decrease, settling in the range of 7.62-7.63%, compared to the previous week’s range of 7.71-7.74%.

Yield Spread and Comparison

The yield spread between the 10-year state development loans (SDLs) and the benchmark 10-year government bond fluctuated between 45-46 basis points. This showed a marginal shift from the previous week’s range of 44-47 basis points.

Questions Related to Exams

Q: How much did thirteen states collectively raise in the recent government securities auction?

A: Thirteen states raised Rs 19,692 crore, slightly surpassing the notified amount of Rs 19,592 crore.

Q: Which states led the auction, and how much did they raise?

A: Karnataka and Uttar Pradesh emerged as leaders, both successfully raising Rs 4,000 crore each.

Q: What were the key details of Karnataka’s auction?

A: Karnataka raised Rs 4,000 crore through two papers, with cut-off yields of 7.60% and 7.64% for 15-year and 16-year papers, respectively.

Q: How did Uttar Pradesh perform in the auction, and what were its key offerings?

A: Uttar Pradesh also raised Rs 4,000 crore through a 10-year paper and an 11-year paper, both with a cut-off yield of 7.62%.

Q: What changes were observed in the 10-year state bond yield compared to the previous week?

A: The cut-off yield on the 10-year state bond decreased, ranging from 7.62-7.63%, compared to the previous week’s 7.71-7.74%.

 

 

 

Piyush Shukla

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