Nine state governments and one Union Territory (UT) raised Rs. 153 billion through state government securities (SGS) on December 16, 2025, ~13% below the amount indicated for this week in the Q3 FY2026 auction calendar. Gujarat and Tamil Nadu did not accept bids for their 15 and 11-year papers, respectively, while Uttar Pradesh partially accepted bids for its 14-year paper, reducing the actual issuance by Rs. 25 billion from the notified amount. The weighted average SGS cut-off eased to 7.33% on December 16, 2025 from 7.41% last week, while the weighted average tenor of all SGS remained unchanged at 12 years during the same period. Nevertheless, the spread between the cut-off yield of the 10-year SGS and the 10-year G-sec (06.48 GS 2035) narrowed mildly to 71 bps as on December 16, 2025 from 72 bps in the last weekly auction, amid a surprisingly wide inter state variation.

EXHIBIT: Indicated and actual SGS issuances in Q3 FY2026 so far

Source: RBI, ICRA Research