Fifteen state governments and one Union Territory (UT) raised Rs. 241 billion through state government securities (SGS) on August 4, 2026, ~10% below the indicated amount in the Q2 FY2027 auction calendar on account of partial acceptance of bids by Assam and Uttarakhand and non-acceptance by Gujarat. In the auction held on August 4, 2026, ~69% of the total borrowing was issued in longer tenors, ~23% in shorter tenors and the balance ~8% in the 10-year bucket. The weighted average tenor of all SGS in the auction held on August 4, 2026 rose mildly to 17 years from 16 years last week.

• The weighted average SGS cut-off increased to 7.57% in the auction held on August 4, 2026, from 7.55% last week. The benchmark 10-year G-sec (06.94 GS 2036) yield and the 10-year SGS yield stood at 6.82% and 7.54%, respectively, on August 4, 2026. Accordingly, the spread between the 10-year SGS and 10-year G-sec yields was 72 bps on August 4, 2026.
• On a cumulative basis, the SGS issuance stands at Rs. 3.3 trillion in FY2027 till date, a mild ~1% above the Rs. 3.2 trillion raised in the same period in the previous year. Notably, the actual borrowings were 15% below the Rs. 3.9 trillion planned for this period, mainly on account of a 20% shortfall in Q1 FY2027.