The Reserve Bank of India is set to conduct a large auction of state government securities on September 29, 2026, as a dozen states line up to raise a combined Rs 22,200 crore through the debt market, underscoring the scale of sub-national borrowing needs in the current fiscal cycle.
The auction will be carried out on the RBI Core Banking Solution, or E-Kuber, system, with competitive bids accepted between 10:30 a.m. and 11:30 a.m. and non-competitive bids between 10:30 a.m. and 11:00 a.m. The central bank said the sale will include both competitive and non-competitive participation, and that individual investors may also place bids under the non-competitive route through the Retail Direct portal.
The borrowing programme spans a wide range of maturities, from short-dated paper to long-tenor securities extending out to 2056, reflecting the varied financing requirements and debt management strategies of the participating states. The securities are being offered as re-issues in most cases, a common practice that helps improve liquidity in existing bond lines and allows states to tap market demand more efficiently.
Assam will raise Rs 800 crore through a re-issue of its 7.83% Assam SGS 2046. Bihar is scheduled to borrow Rs 800 crore via a re-issue of its 7.42% Bihar SGS 2035 and another Rs 1,200 crore through a re-issue of its 7.92% Bihar SGS 2051. Chhattisgarh will seek Rs 250 crore each through re-issues of its 7.40% SGS 2035 and 7.64% SGS 2042. Haryana has lined up Rs 1,000 crore in a re-issue of its 7.90% SGS 2040 and Rs 1,500 crore in a re-issue of its 7.69% SGS 2048.
Jharkhand will raise Rs 100 crore each through re-issues of its 7.72% SGS 2038 and 7.72% SGS 2042. Kerala is seeking Rs 800 crore through a re-issue of its 7.30% SGS 2033 and Rs 1,000 crore through a re-issue of its 7.56% SGS 2039. Madhya Pradesh will borrow Rs 800 crore via a re-issue of its 7.61% SGS 2044 and Rs 700 crore through a re-issue of its 7.75% SGS 2056.
Sikkim's borrowing stands out for its use of yield-based bidding, with Rs 200 crore each offered in 4-year and 16-year tenors. Tamil Nadu will raise Rs 1,000 crore in a 10-year yield-based auction, alongside Rs 2,000 crore through a re-issue of its 7.62% SGS 2041 and another Rs 2,000 crore through a re-issue of its 7.70% SGS 2051. Uttar Pradesh is offering Rs 500 crore through a re-issue of its 7.14% SGS 2032, Rs 1,000 crore through a re-issue of its 7.59% SGS 2042, and Rs 1,000 crore in a 25-year yield-based tranche.
Uttarakhand will raise Rs 300 crore through a re-issue of its 7.70% SGS 2048. West Bengal has the largest borrowing programme in this auction, with Rs 1,000 crore through a re-issue of its 7.07% SGS 2031, Rs 1,500 crore through a re-issue of its 7.64% SGS 2044, and Rs 2,200 crore through a re-issue of its 7.65% SGS 2052.
The RBI said up to 10% of the notified amount of each stock may be allotted to eligible individuals and institutions under the non-competitive bidding facility, subject to a maximum limit of 1% of the notified amount for a single bid per stock. That provision is intended to broaden access to government securities beyond large institutional investors and deepen participation in the domestic bond market.
State government securities, or SGS, are a key source of financing for state-level fiscal spending, including infrastructure, welfare programmes and other public expenditure. The size and tenor mix of the latest auction suggest that states continue to rely heavily on market borrowing to fund budgetary requirements, while investors are being offered a broad menu of durations and coupons across the sovereign-linked state debt curve.
For bond market participants, the auction will also serve as a fresh test of demand for state debt at a time when borrowing calendars remain closely watched for their implications for yields, liquidity and overall market sentiment. The heavy presence of re-issues may help attract investors seeking familiarity and secondary-market tradability, while the yield-based tranches from Sikkim and Uttar Pradesh will draw attention to price discovery in longer-duration state paper.
The auction comes as state borrowing remains one of the most closely monitored segments of India's fixed-income market, given its direct link to public spending and its influence on the broader government securities curve. With Rs 22,200 crore on offer in a single day, the sale is likely to be a significant event for banks, insurers, mutual funds and retail investors tracking state debt opportunities through the RBI's electronic platform.