In a large-sized auction, 19 state governments and two Union Territories (UTs) raised Rs. 548 billion (including greenshoe) through state government securities (SGS) on March 24, 2026, ~14% above the amount indicated in the Q4 FY2026 auction calendar. The issuance was lower than the notified amount on account of non-acceptance/partial acceptance of bids by Assam, Jharkhand, Karnataka, Kerala, Nagaland and Tamil Nadu. The weighted average SGS cut-off jumped by 16 bps to 7.69% (highest since mid-January 2024) on March 24, 2026 from 7.52% last week, amid the weighted average tenor remaining stable at 14 years. Additionally, the spread between the cut-off yield of the 10-year SGS and the 10-year G-sec (06.48 GS 2035) widened to 78 bps as on March 24, 2026 from 75 bps last week. The inter-state spread for 10-year issuances also stood at a surprisingly wide 13-week high of 32 bps in this auction.

EXHIBIT: Indicated and actual SGS issuances in Q4 FY2026 so far

Source: RBI, ICRA Research