Government and States Secure Funds Through Massive Bond Auctions

In a robust display of the financial market's appetite for government securities, the central Indian government on Friday auctioned bonds worth Rs 27,000 crore. This amount comprised Rs 15,000 crore of bonds maturing in 2030 and Rs 12,000 crore maturing in 2054, which were fully subscribed. The shorter-term securities offer a yield of 6.01%, while the longer-term ones provide 7.09% annualized returns.

The auction was conducted using a multiple price-based method, with bids submitted electronically through the RBI's Core Banking Solution (E-Kuber) System. Between 9:00 AM and 9:30 AM, primary dealers, entities licensed by the RBI to trade government securities, participated actively. Their earnings from these transactions are to be credited to their current accounts with the RBI on the same day.

Simultaneously, twelve Indian states engaged in their own fundraising efforts, raising a combined total of Rs 26,900 crore through state government securities. Notably, Maharashtra spearheaded this drive by securing Rs 6,000 crore across four securities with yields ranging from 7.12% to 7.16% over 22 to 25-year terms. Andhra Pradesh, Uttar Pradesh, Telangana, Punjab, and other states also participated in these auctions, offering different yields influenced by security tenures and prevailing financial market conditions. These efforts align with states' agendas to support their capital and fiscal needs.

(With inputs from agencies.)