In the largest auction so far in Q3 FY2026, 13 state governments raised Rs. 297 billion through state government securities (SGS) on December 2, 2025. After five consecutive weeks of lower-than-indicated borrowing, SGS issuance in this auction was a sharp 41.5% above the Rs. 210 billion indicated for this week, in the Q3 FY2026 auction calendar; the impact of the double tranche of tax devolution in October 2025 now seems to have worn off. With the rise in the size of borrowing, and dimming hopes of a repo rate cut, the weighted average SGS cut-off jumped to 7.39% on December 2, 2025 from 7.29% last week, despite a mild decline in the weighted average tenor of all the SGS to 14 years from 15 years during the same period.

EXHIBIT: SGS issuances in FY2026 so far