Research Report

In H1 FY2027, 25 states and two Union Territories (UTs) raised gross State Government Securities (SGS) issuances of Rs. 4.98 trillion, marginally lower than Rs. 5.01 trillion raised in H1 FY2026 (YoY growth of ~30%). The SGS issuances in H1 FY2027 were Rs. 754 billion or 13% lower than the indicated amount. Notably, 19 states had adopted the Benchmark Issuance Strategy (BIS) in a phased manner in H1 FY2027 that was introduced by the RBI in Q1. The variation between actual and indicated borrowings in H1 FY2027 was driven by three non-BIS states Karnataka, Haryana and Tamil Nadu (TN).

• Sharp pick-up in the trend of reissuances in SGS in H1 FY2027: Following the introduction of the BIS, 24 states opted to reissue SGS in H1 FY2027, up from 4-9 states during H1 FY2023-FY2026.
  
• Most states display a shift in their preference for longer-tenor securities from the 10-year: The share of more than 10-year or longer-tenor borrowings jumped to 74% in H1 FY2027 from 50% in H1 FY2023 while the share of borrowings in the 10-year segment declined to 7% from 33%.