Five state governments raised Rs. 136 billion through state government securities (SGS) on June 30, 2026, in line with the indicated amount in the Q2 FY2027 auction calendar. The Reserve Bank of India (RBI) has placed the gross issuance of State Government Securities (SGS) at Rs. 3.2 trillion in the auction calendar for Q2 FY2027 released on June 25, 2026. Encouragingly, 10 more states/UTs (Delhi, Himachal Pradesh or HP, Jharkhand, Manipur, Meghalaya, Odisha, Punjab, Sikkim, Uttarakhand and West Bengal or WB) have given their consent to the RBI to adopt the Benchmark Issuance Strategy (BIS) from Q2 FY2027. With this, the number of states that follow the BIS has increased to 19 from nine in Q1 FY2027.

·       In the auction held on June 30, 2026, ~93% of the total issuance was in longer tenors and the balance ~7% in shorter tenors. The weighted average tenor of all SGS in the auction held on June 30, 2026 rose to 20 years from 14 years in the last week. Despite this, the weighted average SGS cut-off eased by 5 bps to 7.58% in the auction held on June 30, 2026, from 7.63% last week on account of softening in G-sec yields.

·       On a cumulative basis, the SGS issuance stands at Rs. 2.17 trillion in FY2027 till date, a mild 0.7% lower than Rs. 2.19 trillion raised in the same period previous year. Notably, the actual borrowings were 19% below the Rs. 2.7 trillion planned for this period, mainly on account of 23-27% shortfalls in April and May 2026.