RBI announces auction of Rs 44,500 crore state government securities; 16 states to take part

The Reserve Bank of India (RBI) will conduct an auction of State Government Securities (SGS) worth Rs 44,500 crore on February 24, with 16 states set to participate, as per a ANI report. 

The official notification issued by the central bank says the auction will raise a total of Rs 44,500 crore.

As many as 16 state governments — Andhra Pradesh, Bihar, Chhattisgarh, Goa, Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Nagaland, Punjab, Rajasthan, Sikkim, Tamil Nadu, Uttar Pradesh and West Bengal — will raise funds through this auction. The securities have different maturity periods, ranging from three years to 28 years, reflecting the varied borrowing needs of the states.

Several states are re-issuing securities. These include Chhattisgarh (7.75% SGS 2036), Haryana (7.73% SGS 2045), Karnataka (7.25% SGS 2033), Tamil Nadu (7.25% SGS 2032 and 7.45% SGS 2035), Uttar Pradesh (7.24% SGS 2033 and 7.90% SGS 2034), and West Bengal (7.94% SGS 2048). Some states, such as Gujarat and Maharashtra, have also indicated additional borrowing through green-shoe options.

The auction will be held on RBI’s Core Banking Solution platform, E-Kuber. Competitive bids can be submitted between 10.30 am and 11.30 am on February 24. Non-competitive bids will be accepted between 10.30 am and 11.00 am.

Eligible individuals and institutions can participate under the Non-Competitive Bidding Facility. Retail investors can also place bids through the RBI Retail Direct portal.

Up to 10 per cent of the notified amount of each stock will be reserved for eligible participants under the non-competitive segment, subject to a maximum of 1 per cent per stock for a single bid. Bidders can submit multiple competitive bids at different yields or prices, provided the total amount does not exceed the notified amount for the respective state.

The cut-off yield or minimum price will be decided by the RBI based on the bids received. Securities will be issued in a minimum denomination of Rs 10,000 and in multiples thereafter.

The auction results will be announced on the same day. Successful bidders will have to make payments on February 25, 2026, during banking hours at the RBI’s regional offices.

The securities will carry interest at fixed rates, payable half-yearly on August 25 and February 25 until maturity. Re-issued securities will carry the original coupon rate.

Investments in these securities qualify for Statutory Liquidity Ratio (SLR) purposes and are eligible for the ready forward facility under existing regulations.