Research Report

Eight state governments and one Union Territory (UT) raised Rs. 178 billion through state government securities (SGS) on October 28, 2025, nearly 42% below the amount indicated in the Q3 FY2026 auction calendar for this week. However, the weighted average SGS cut-off hardened by 11 bps to 7.33% on October 28, 2025, from 7.22% last week, amid a rise in the weighted average tenor of all SGS to 17 years from 15 years during the same period. Nevertheless, the spread between the cut-off yield of the 10-year SGS and the old 10-year G-sec (6.33 GS 2035) eased to 65 bps as on October 28, 2025, from 68 bps in the last weekly auction. The spread with the new 10-year G-sec (06.48 GS 2035) yield declined to 72 bps from 74 bps in the same period.

EXHIBIT: SGS issuances in FY2026 so far

Source: RBI, ICRA Research